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Taken before the Justice Committee
on Tuesday 1 February 2011
Sir Alan Beith (Chair)
Mr Robert Buckland
Mrs Helen Grant
Examination of Witnesses
Witnesses: Emma Baldwin, Free Representation Unit, Rebecca Scott, Legal Advice Manager, Royal Courts of Justice Advice Bureau, and Sally Denton, Senior Solicitor, Nottingham Law Centre, gave evidence.
Chair: I must first ask colleagues to declare any interests they might have.
Mrs Grant: I would like to declare an interest as a senior partner of an existing legal aid firm. We have a legal aid contract.
Mr Llwyd: I have practised in family law, which is publicly funded, both as a solicitor and a barrister, but I do not intend to practise at the moment and have not practised since April.
Yasmin Qureshi: I have two declarations. I am still a barrister but I used to practise and did receive legal aid receipts. I do occasionally still receive them now, although not many. Secondly, many, many years ago I used to be one of the volunteers for the Free Representation Unit.
Karl Turner: I have not practised publicly funded work since before the election, but I am still a member of my local chambers in Hull.
Q62 Chair: Thank you very much. You can assume the rest of us do not have any interests, unless we finish up seeking your help for any kind of trouble, and I am sure that won’t happen.
Emma Baldwin, Rebecca Scott and Sally Denton, welcome. Between you, you represent the Free Representation Unit, the Royal Courts of Justice Advice Bureau and the Nottingham Law Centre. We particularly asked you to come along-and we are very grateful to you-to look at how things work out on the ground and in practice. The second half of today’s session is more about the views which organisations working in this field take nationally. I will start by asking whether, on the basis of your practical experience, you think there is no alternative to the present or similar levels of spending on legal aid, or whether you accept that in the financial situation we have ways have to be found of limiting the costs of legal aid and advice. Do you have any thoughts on that?
Emma Baldwin: Yes, we do. We are concerned about these proposals because of the wider effects that they are going to have. In terms of the money saving, our first concern is that we do not think the cuts, as proposed, are going to save money. We think that idea is based on a false premise as to what the effect of legal aid is in the sector at the moment. We think that legal aid practitioners are diverting cases away from tribunal because they are solving the issues before it gets to that stage. That is a saving because tribunal time is very expensive, and if those cases weren’t diverted they would end up in tribunal. Of the cases that do get to tribunal, if there has been some representation at an earlier stage, that means the cases are dealt with more efficiently when they get to tribunal, and again you are saving court time and the time of the respondents as well because there is an easier case for them to understand and deal with.
Q63 Chair: Do you have a rough picture of how much of the income of your organisation depends on legal aid at the moment?
Sally Denton: In terms of Nottingham Law Centre, in the financial year 2010 to 2011 legal aid comprises 58% of our total income. It is £308,000 out of £528,000 income. It is fundamental to us being able to provide specialist advice to people that really need it. If we didn’t have that legal aid funding, we wouldn’t be in a position to deliver specialist debt and welfare benefit advice, which in turn ensures that people don’t face possession proceedings and homelessness, and that people can continue to care for their children and don’t need to involve social services in their lives. It enables us to nip problems in the bud, getting people advice when they need it.
Chair: Do you have a supplementary point, Elizabeth Truss?
Q64 Elizabeth Truss: I do, yes. I just wanted to understand what you think the cost drivers are of legal aid. Is it partly the legal system and the way we go about things? Is it the cost of lawyers? Is it broader social issues that are driving the cost? What are the key cost drivers of the legal aid bill?
Sally Denton: Some research that we undertook within the Nottingham advice sector identified that about 42% of the work we did was caused by system failure in other organisations. That was poor decision making in other organisations such as the Benefits Agency and housing benefit departments.
Q65 Chair: This is a systems failure rather than an unsatisfactory judgment being made?
Sally Denton: But there are lots of examples of delays within the housing benefit department, which then cause rent arrears and possession proceedings. We have had cases that have necessitated three or four adjournments at County Court level to enable housing benefit issues to be resolved, which represents a huge cost in terms of court and social landlords’ time and legal aid spend.
Q66 Mr Llwyd: Can you give us examples of private law cases which will now be outside the scope of the legal aid scheme? What, in your view, will be the impact on the families concerned?
Rebecca Scott: I can give an example of that type of case. I don’t have a legal aid franchise at my charity so I contacted a colleague at another charity. She is a family lawyer with a legal aid franchise. She gave me a case study of the new proposals. Basically, in this case her client had suffered long-term domestic violence from her partner. They had children. She had left her partner and he did not know where she lived. She came to us for advice a year after he had left, because he wanted contact with the children. Under the new proposals she would not have been able to get legal aid because the partner had never been convicted and she had never obtained a previous injunction against him. Because he didn’t know where she lived, she wouldn’t be entitled under the new system for legal aid, as there wouldn’t be any merit. In that situation now, under the new proposals, she would have to go to court alone, face her abuser alone and probably not defend the case very well. In that situation, under the new proposals, a full contact order might be made, which would be wholly inappropriate for a partner who is violent. As it was, they defended the proceedings and a supervised contact order was made. The contact takes place in a supervised environment. That, hopefully, highlights the difference under the new and old proposals and how potentially dangerous these changes will be.
Q67 Mr Llwyd: That case is not unique by any means, is it?
Rebecca Scott: No.
Q68 Mr Llwyd: Does anybody else want to address the point?
Sally Denton: Certainly in terms of the work that we do, we would be very concerned about some of the proposed cuts in terms of welfare benefits because we see people who are experiencing periods of time where they are, for example, in receipt of nil income because of decisions that have been made regarding their right to reside and immigration status, which are very complicated issues. If we can resolve those, then we can prevent those people from falling into rent arrears.
Increasingly, we are seeing people who are living in private rented accommodation, where there are mandatory grounds for possession available where there are rent arrears. Even though under the proposals possession proceedings will still be covered, the reality of the situation is that once it gets to the possession proceedings stage there won’t be anything that we can do to prevent an order for possession being made because it is mandatory. The only way to prevent those people from being evicted is to get involved at an early stage, to help them to deal with what can be extremely complicated welfare benefits issues. If we can’t get in there, then there is a huge cost in terms of the cost of eviction and, if it involves a family, the cost of re-housing that family as homeless, the knock-on costs in terms of their education and the implications for social services.
We get referred clients with welfare benefits problems by social services because they know that, if the clients don’t access assistance in obtaining their welfare benefits entitlement, the costs to the social services department will be increased because they will be the ones that have to pick up the pieces under, for example, Children Act duties.
Q69 Mr Llwyd: The Green Paper, of which you will be aware, states that "the provision of legal aid in this area is creating unnecessary litigation and encouraging long, drawn-out and acrimonious cases". Further, it says that "people should take responsibility for resolving such issues themselves and that this is best for both the parents and children involved". How do you respond to those statements?
Sally Denton: Before we can take on a case that is publicly funded we have to undertake a sufficient benefit test. We have to look at the case in terms of the costs relative to what we can achieve for the clients and the likelihood of success. We have to apply a test as to whether a private paying client with moderate means would be advised to take on that case. We also have key performance indicators that require us to demonstrate that we have achieved a successful outcome on 40% of our cases. We will not take cases on that do not have sufficient benefit. Our service is oversubscribed as it is at the moment, which drives us to try to achieve early resolution. We do not want to go to trial if we can settle a case appropriately before then.
In fact, what we would say is that the reverse is true to that. Clients whose cases are appropriately funded and are prepared appropriately right from the start are likely to resolve without the need for litigation. Certainly, even if litigation has started, they are likely to settle without the need for trial. I would say that the provision of adequate funding prevents more litigation than it causes. A significant proportion of the cost drivers are from outside our organisation in terms of the system failures within other organisations that drive litigation.
Q70 Chair: Can I check something with you that arises from that? You have talked of your key performance indicators as if they are measuring a successful outcome for the client. But from the public point of view and the disposition of public funds, surely a successful outcome is that the interests of the child are best looked after and public money is not wasted in competitive processes between two parents arguing over access to their child, who ought to resolve this issue without getting into legal proceedings.
Rebecca Scott: I disagree there. I think that’s where the law is there to protect children, and early intervention in family proceedings can reduce protracted litigation.
Chair: I am talking specifically about private law cases now.
Rebecca Scott: We are concerned with the withdrawal of funds from legal aid funded cases.
Q71 Chair: The statement which Mr Llwyd quoted the Government made about private family law cases.
Sally Denton: There is certainly a very strong argument to say that involving advisers at an early stage takes quite a lot of the acrimony out of issues. It enables people to step back and deal with things in a much more rational way. I don’t do family, but I take action against private landlords. Sometimes those cases are much more protracted because of an unreasonable or entrenched position that those people take. If they are legally represented, it generally means that cases are resolved much more satisfactorily and much more quickly. If the parties are going to have to have some ongoing relationship with each other, then it is in everybody’s interests that those relationships are the least acrimonious going forward as they can be.
Q72 Mr Llwyd: But it still remains, of course, that there will be a percentage of the hard cases where nothing can be agreed and it will have to go to tribunal to be resolved. Nothing can be done about those, presumably.
Rebecca Scott: Yes, but it is still a better resolution for everybody if there is equality of arms when the parties do go to tribunal. If one party is weakened by being unrepresented and they are forced into a terrible settlement for them and their children, you then have all those secondary problems of debt issues, mental health issues and possibly, worst-case scenario, having to rehouse someone who has been made homeless. Children suffer far more in those circumstances than by having a parent with a lawyer who presents their case fairly.
Emma Baldwin: Sometimes you do need the court or the tribunal to settle the matter.
Q73 Mr Llwyd: This follows on from what Ms Denton said earlier on. How much of a contribution do you think mediation is making, and will be making in the foreseeable future?
Rebecca Scott: We think it is a valuable component of legal advice, but we don’t think it is the only component. We have concerns that only a small amount of mediations do resolve issues. There has not been much research on mediation and we think the impact is unknown. We are concerned again that some parties might be pressurised into settlements that might not be suitable for them because they don’t have proper representation when they go into the mediation. Ultimately, that might result in parties going back to court anyway to try and enforce agreements that were made in the mediation. Our position is that there isn’t much research on mediation and we think it is a valuable component, but we don’t think it is any substitute for proper legal advice.
Q74 Elizabeth Truss: On the subject of legal aid, you mentioned that there is a lot of cost coming from external agencies. It seems to me, if you look at the international statistics, that we are not only expensive in terms of the number of legal aid cases that are fought but also the cost per case. Why is the cost per case so much higher in Britain than it is in equivalent countries with similar legal systems? That can’t be the fault of the Benefits Agency or external parties. That is an issue to do with the legal process, is it not?
Sally Denton: If you take a case involving possession proceedings for rent arrears, if, as frequently happens, we have our first contact with that defendant as duty solicitor because they have not been able to access legal advice prior to that, then that case will need to be adjourned to enable housing benefit issues to be resolved. Potentially, if those issues are not resolved quickly because of delays within other organisations, then that case will be adjourned again, and potentially again, and on some occasions three or four times. That will, in turn, drive up the cost of that case. For a social landlord to get possession where there are rent arrears, they have to establish that it is reasonable for a possession order to be made. It is not reasonable for an order to be made whilst benefit issues remain outstanding. So those issues have to be allowed to catch up before a decision can be made in relation to the claim.
Q75 Elizabeth Truss: Is that the only reason that costs are so high per case? Are there things that can be done within the legal system to reduce the cost per case? I wonder if the other witnesses could comment as well.
Rebecca Scott: My answer is more of a question. I wonder if the Government have considered legal aid cuts. It seems that they have considered it in isolation. I wonder if they have been looking at the efficiency of the Legal Services Commission and the way it is administered, because it does seem to be quite a bureaucratic, inefficient system that frustrates solicitors and legal practitioners. It seems that the Government have just considered these cuts in isolation without looking at other savings across the board.
Q76 Elizabeth Truss: What would you do to the Legal Services Commission to make it efficient?
Rebecca Scott: Not being knowledgeable enough about it, I would have a look at its processes and ask practitioners what is slowing the process down and where it is going wrong basically.
Elizabeth Truss: So you are saying it is-
Chair: I really must give Yasmin Qureshi a chance to come in.
Q77 Yasmin Qureshi: Typically, what kind of people do you assist with legally aided social welfare cases? If free advice was not available to them, what would be the impact on those people?
Sally Denton: A high proportion of the clients that we see at the Law Centre in Nottingham fall within the vulnerable bracket. They are people with long-term health problems, including a significant number of people who have been diagnosed as terminally ill. We see people with learning disabilities and with mental health problems. We see a large number of people with substance and alcohol dependency issues. We see people with language problems and people who have recently come to this country and are not familiar with the systems. We see single parents with little support networks who are very isolated. Increasingly, we are seeing people who have totally lost confidence in their own ability to deal with their problems. We see people in debt who have got to the point where they won’t even open their post, answer the door or answer the telephone because they cannot deal with the situation any more. We see people in relation to benefit problems who have no income at all, and they have no income at all for protracted periods of time.
These are not people who can’t be bothered to take responsibility for their situation; they are people who can’t take responsibility for their situation, and sometimes they just need a bit of help to get back on the right track. These are people whose circumstances frequently impact on their ability to maintain a basic standard of living for themselves. It impacts on their ability to parent their children, to maintain a roof over their head, which are fundamental and basic needs that they have. In our view, a continuation of the situation impacts on their health and the cost in terms of maintaining their health and healthcare services. It impacts on the cost of their children’s education and it also impacts on their chances of returning to work and returning to play a productive role in their community.
Q78 Chair: Is it legal advice they need, if those are the circumstances?
Sally Denton: Yes, because quite often you will find that what underpins the problem is somebody who has repeatedly tried to secure the benefit entitlement that they should be receiving and they have not been able to obtain that. It is set in place as a safety net for people, and there are people for all sorts of reasons, including poor decision making, who have not been able to access that basic level. It is the same with debt. There are people who are struggling to deal with debts, where a lot of those debts are challengeable and where the practices of the lending institutions are questionable. People need an opportunity to be able to challenge those and to be represented, because those issues are underpinning their whole lifestyle or their finances, and they have a massive knock-on effect.
Q79 Chair: Do any of the others want to add to that?
Rebecca Scott: I was just going to add to that that when people come to see us they are at a crisis point with their legal problems, but resolving the legal problem can be the first step in turning their whole lives around. My advice centre has a very holistic approach to problem solving. We have different projects. Once you have resolved court proceedings, hopefully satisfactorily, we will refer out and they will get debt advice on how to maximise their income and manage a budget. Hopefully coming to us can be the first step in turning things around, even though it might be seen as legal advice.
Emma Baldwin: The advice we give is legal advice because people have legal problems. They have cases in front of the Social Security and the Employment Tribunal. Their cases often deal with complex matters of law and they have to present evidence and their case in a way which they are not able to do. They are not used to the normal processes of tribunals in terms of fact-finding, putting forward the important points that need to be made and evidencing those when they can. People don’t know how to do that without assistance. It is not something that people naturally know, so it is legal advice that they need, and that is what we provide for them.
Q80 Yasmin Qureshi: Leading on from that, would you therefore accept-and we have received written evidence to this effect-that helping somebody at the earlier stage prevents more expensive problems occurring later on? Would you agree with that?
Rebecca Scott: Absolutely.
Emma Baldwin: Yes.
Sally Denton: In terms of debt, I see a lot of clients who are facing, for example, mortgage possession proceedings. Had they been able to get debt advice at an earlier stage they would have prioritised the roof over their head. They would have been able to explore challenging other debts, maximising their income and other ways of resolving the situation such as capitalising arrears or extending the term of the mortgage. None of these things are available by the time we see the person at possession proceedings stage. Quite often the situation has become so entrenched by then that we can’t avoid them being evicted. That then has huge knock-on costs in terms of other departments. Similarly, the issue with getting early advice in relation to benefits saves all sorts of costs in terms of possession proceedings and eviction.
Emma Baldwin: Cases are referred to us when they have a hearing date, so we get involved quite late on in proceedings, when often there are only a number of weeks until the hearing. But we still find, in that window of time, that we can make quite a big impact. Sometimes with our welfare benefit cases, when submissions and evidence are made, the judge decides on the papers in favour of the client and the hearing can be vacated. With our employment cases, we find that about 50% of them settle. We manage to settle them between the point at which we get them and the hearing date that is scheduled. Intervention at any stage can help to resolve the matter, and the earlier the better.
Q81 Yasmin Qureshi: One of the reasons given in the Green Paper for removing welfare benefits from scope is that "these issues are of lower objective importance (because they are essentially about financial entitlement) than, for example, fundamental issues concerning safety or liberty". How would you respond to that?
Sally Denton: As I have already said, we increasingly see people who are excluded from benefits in their entirety. That is likely to increase as we see increased Jobseeker’s Allowance sanctions, which will potentially be for up to three years. Those people are therefore receiving no income, which must have implications in terms of their health and safety. Additionally, we see people who are not in receipt of nil income but, because they are not receiving all of their benefit entitlement, are not receiving the protection that the benefits entitlement safety net should be providing to them. There is a safety net for people, in the form of welfare benefits, which depends on their circumstances. There are a significant number of people who are not able to access that safety net. That may be due to language or health problems or poor decision making. It is fundamental to their whole life that they are given help to resolve those issues. These are not necessarily straightforward issues. The welfare benefits legislation in some areas is incredibly complicated. The right to reside issues are changing all the time. It is very difficult for somebody who is not a specialist adviser to keep abreast of the changes. Housing benefit legislation is terribly complicated.
Q82 Chair: Can I just clarify something from that? It is on the question of whether you need to be a fully trained and experienced solicitor in order to handle these matters, or is the practice, even in your organisation, that much of this advice will be given by people who specialise in it but not on the basis of being legally qualified either as a solicitor or indeed as a legal executive?
Sally Denton: Within our organisation we have some generalist advisers. They are able to give advice in relation to some of the more basic issues surrounding benefits. So those are not issues that are dealt with by our specialist team. The specialist team is dealing with interpretations of legislation, which is incredibly complicated. They are looking at case law and law not only in the area that directly relates to the benefits but in relation to associated issues like immigration. It does need people with a high level of qualification.
Q83 Mr Llwyd: Relatively speaking, there is a very small percentage of solicitors who are adequately qualified.
Rebecca Scott: Yes.
Sally Denton: Yes. There are not very many people that deal with welfare benefits at all, which is why, for example, in Nottingham a lot of work has been done in mapping need and making sure that advice is delivered by the right people. We try to avoid specialist advisers giving a basic level of advice, because there are not enough specialist advisers. We want the specialist advisers to be dealing with the complicated issues that involve interpretation of legislation.
Emma Baldwin: I would add that in the social security sector some practitioners are legally qualified solicitors or barristers and others are not, but the specialists in that field are all highly skilled and highly experienced. It is not so much your qualification that matters. It is your knowledge and experience of that particular area of law, because it is so specialised. It is an entirely self-contained statutory scheme. General legal concepts abut against it from time to time, but essentially it is a universe of its own and it is your knowledge and your ability to keep up to date and to work around and within that knowledge base that is important.
Q84 Claire Perry: I think we all suffer as well, as MPs, from the complexity of these issues. I know I certainly refer many of my constituents to the CAB and their legal teams. If we start from the premise that we have to reduce public spending and work out the best way to do that, one of the things I am struck by is that all three of your organisations are doing similar things and helping similar people. Of course, the CAB is also doing that through its specialist teams. What do you make of the proposals for potentially streamlining, working together and potentially using a telephone advice service? Have you considered those as a collective group or have you rejected those entirely? I think we would like to keep this access available, certainly to people who find it difficult for various reasons to access what is increasingly a very complex world of benefit entitlement. What we would like to see is whether there are ways to do that in a more streamlined fashion. I would be very interested in your comments on that.
Sally Denton: It is important that things are dealt with at the correct level. I do accept that there are basic queries that could be dealt with at a generalist level. I do not think that the telephone gateway is the appropriate way of directing people to advice. There is room for telephone advice to complement face-to-face advice, but I have considerable concerns about the proposals in terms of telephone gateway. There is both the idea that that will be the only way into advice and also there is an assumption that a lot of specialist level advice can be delivered by telephone. That is going to present considerable problems to a lot of the clients that we see. Telephone advice does not suit everybody. It does suit some people very well, but it does not suit everybody. It does not suit people who lead chaotic lifestyles or people who do not speak English very well or have other barriers to their communication.
Telephone advice is only as good as the information that that adviser is given by the client. There are lots of situations where clients do not present their issue in a particularly coherent or accurate way. Therefore the advice that flows from it is not going to be particularly helpful or accurate. Clients, for example, inevitably say, "I’ve got an eviction," but that can be a letter saying that they have rent arrears right through to the bailiff appointment. Unless you can correctly identify the stage that they are at, the advice that flows from that situation is not going to be helpful and the decisions about where that person needs to go for advice are not going to be appropriate.
There are also issues because we are, as a law centre, firmly entrenched in our local community. We understand the pressures that people are under. We understand the organisations. We have a lot of referral networks who bring clients to us. We have clients that come back and we know the background of their case. We are able to address issues that crop up time and time again because we can see patterns. Then we can campaign generally in relation to those, which resolves issues and saves costs. All of that local knowledge, understanding, communication networks and ability to settle cases early because we know the people involved will be lost by the telephone gateway.
Q85 Claire Perry: Forgive me, I must challenge that. It is a little bit like being an MP in a way, in that you do have the same clients that present again and again with problems. Clearly there are some people who do not understand the documents and the immigration law, but you can also polish off an awful lot of people with a phone surgery who perhaps present slightly less complex cases. Is there not a role for perhaps triaging a little bit more to ensure the face-to-face resources are targeted at the most needy people, and perhaps think a bit about how we-
Chair: We need to keep the questions fairly brief because we have a lot more things to get through.
Rebecca Scott: We think it has a role, but it is just one part to play in a whole provision of legal services. Also, there is an assumption that we are all going to be here to provide a service but all our funding is under threat. That is a decreasing picture and our services might not be here next year. I would disagree with the assumption that we are all going to be here to pick up the pieces. The pro bono sector is under attack at the moment and all the services that we rely on are being cut.
Emma Baldwin: We are not all doing the same thing. At FRU we provide representation in tribunals. That is not covered under legal help or legal representation. We are providing a joined-up service with legal help providers and agencies that have some of their funding from legal help, some from the local authority and some from charitable funds. Our business model is based on agencies of that type sending the appropriate cases to us at the appropriate time. We make sure it is the right type of case, that the client wants to be referred, they photocopy all of their documents and they send those in to us. We get 1,600 of those a year in the Greater London area. A lot of that work is done by our partner agencies. Sending those cases in is a big chunk of work that they do. If they do not survive, with legal aid funding going, because if it is a strand of someone’s funding that could be the final straw, if that goes, the business could then become unviable or certainly it might have to retrench and become smaller and limit the type of work.
Q86 Chair: Presumably some of them have already had their matter starts reduced by the LSC. Have you had that experience?
Emma Baldwin: Yes.
Q87 Yasmin Qureshi: I have one final question. It seems that a lot of immigration cases will be removed, bar those who are detained, from the scope of legal aid. What do you think will be the impact of removing these cases?
Rebecca Scott: We welcome the fact that asylum and detention has been kept within scope. We think that is vital. For those that are out of scope, all I can say is that I can’t think of any support services that are going to be there to support them. They are a very vulnerable client group because generally English isn’t their first language, just to start, but I can’t think of any other charitable agencies that are going to step in and fill that gap. To my knowledge there just aren’t any. I wonder if that will make the Immigration Tribunals more or less efficient. My suspicion is that it will make them less efficient, although I have no hard evidence to support that.
Q88 Yasmin Qureshi: They could have more appeals, couldn’t they?
Rebecca Scott: Absolutely, yes.
Q89 Chris Evans: The Green Paper recognises that its proposals will lead to an increase in the number of litigants in person. What potential problems do you see arising out of this?
Rebecca Scott: The research shows that people without legal representation are more likely to pick a more formal route to resolve their problem rather than consider ADR. They are more likely to litigate less effectively, to make mistakes and to request an adjournment. All this racks up time and cost for the courts and also for the represented client. They are more likely to have a less fair outcome and therefore more likely to appeal. They are more likely to put pressure on court staff to provide legal advice, which they are not qualified to do, which again leads to mistakes. There is nothing to support having a client without representation. Early intervention and early proper legal advice is always beneficial. If a client has proper legal advice at the start, they can get advice on whether there is merit to the case, and with that advice they might be less likely to litigate than going into it blindly without that early intervention. There is nothing to support having someone going to court without representation. I would say for 95% of the clients I see it is impossible for them to do that, for a variety of reasons.
Q90 Chris Evans: I want to explore that point further about clients not being able to represent themselves. The Green Paper says that tribunals are user-friendly. I come from a trade union background and I had a number of my members, experienced trade union representatives, who frankly found the whole experience very daunting. How would the people you work with find that process? If all three of you could comment, that would be very helpful.
Emma Baldwin: We think that in tribunals, panels and the judges, in particular, do make a great effort to enable litigants to take part in the process. They are less formal than a court hearing, but that is only in relative terms. They are less formal but they are still formal fora, and for many of our clients that will be the most formal meeting that they ever have to attend. People do find it daunting and frightening, and sometimes can’t face going. One of the values of having a representative present is that the client is then going to turn up because there is somebody with them. That is going to enable the tribunal to use their inquisitorial jurisdiction and find out what is going on. We would also say that the formality, or lack of it, is not really the most important point. The reason that conducting litigation is difficult for people is because they have a very real problem that is very important to them that they are trying to resolve. They are in a situation where they often do not understand what is going on and they cannot follow proceedings. That is the problem. It is not whether the tribunal are friendly or whether they are sitting on a raised dais or on the same level. It is the ability to engage with what is going on.
Q91 Chris Evans: The experience I found was that, when you are mixed up in a case and it is your case, you take ownership of it. It becomes very emotional. A lot of the problems that I faced when I was a union official was that people still felt, even if the panel was very friendly and they were dressed down or whatever, that they were sitting in judgment on them. That was a huge problem. I don’t know if that is the same thing with your clients as well. Do you feel like that? I know that is more of a statement than a question.
Emma Baldwin: Yes, they are, but that is the judge’s role. The judges can be as friendly and as enabling as they can, but they have a number of roles to play in the tribunal. One of their roles is controlling the court. That often involves controlling the litigants. They do have a judgment role and people do find it very upsetting and very emotional. Often having representatives involved immediately helps to lower the emotional temperature in the room. It lowers the emotional temperature in discussions, particularly with employment cases. Your chances of settling if you have both parties represented absolutely sky-rocket. It is just much more difficult if even one of the parties is not represented.
Q92 Chair: Weren’t many of these tribunals intended originally to be fact-finding bodies which did not expect to have representation at them? Is it not the case that, increasingly, we see the need for there to be some kind of appeal mechanism for all kinds of decisions, and so a tribunal is set up for that purpose but not on the assumption that there is going to be a vast expansion of legal representation commensurate with this growth in appeal mechanisms?
Sally Denton: Just because the procedure is straightforward, it does not mean that the law that underpins the decision is straightforward. That is why people need representation. It is not always to stand up and speak; it is to assess what the basis of their challenge is before they even get to the tribunal.
Q93 Mr Llwyd: In industrial tribunals, as Sir Alan says, the whole idea was a fact-finding tribunal to keep it simple. It has now developed almost as a separate system from the courts. When I began in practice, Harvey on Industrial Relations and Employment Law was the main book. It was a single volume. It is now five or six volumes long with as much case law as you like. It has just become so complex that it is daunting for any individual without help, isn’t it?
Sally Denton: Yes.
Yasmin Qureshi: It is the EC law as well.
Mr Llwyd: That is right.
Chair: I am sorry. We took the questioning from Mr Evans.
Q94 Chris Evans: I will finish here because time is moving on. In tribunals where the DWP and most employers have legal advice, would it be fair to say that taking away help in preparing for hearings would put appellants at a severe disadvantage?
Rebecca Scott: Yes.
Emma Baldwin: Yes, it would, but I think it is important to bear in mind what is being provided at present. People get legal aid which helps them to prepare their case, but they don’t get help with representation. Some solicitors do representation pro bono. Some law centres and other organisations match-fund so they can afford to attend the tribunal with their client, but it is not being met by legal aid. Then there are organisations like ours that do representation.
Q95 Chair: That leads me on to a point for you, Ms Baldwin, which is that your website says that the Green Paper gives a misleading image of the Free Representation Unit when justifying the removal of legal aid on the basis that there are alternative sources of assistance like you available. What would you like to say about that?
Emma Baldwin: The issue we had with the statements in the consultation document at paragraph 4.218 and at page 193 was that there was an implication in what was being said that the cuts in welfare benefits provision could be ameliorated by our organisation and organisations like us. The first point we wanted to make was that we are very proud of the work we do but we do not provide initial advice, so we do not do legal help work, which is what is being proposed to be cut, and in any event the pro bono sector has a small role to play. In terms of welfare benefits, we represent in about 500 tribunals a year, but currently there are 339,000 social security tribunal cases in the system. The work we do is small in comparison to the overall picture. As far as pro bono organisations go, we think that the volume of work we do is very high. We are not aware of anybody else doing work at that rate or at that level. We were concerned about the scale issue and an implication that we might be able to fill the gap. We are just not in a position to plug the gap that would be left if welfare benefit provision was reduced to the extent that we fear it might be if these cuts go through.
Q96 Chair: Yours is a service which is essentially provided entirely voluntarily by those involved.
Emma Baldwin: Yes. We have round about 500 volunteers active in any one year. They are largely students and young lawyers, and they do the bulk of the representation that we provide.
Yasmin Qureshi: That is what I did as well years ago when I was a law student. I started doing free work.
Q97 Chair: Is there more scope for expansion of this kind of voluntary help?
Emma Baldwin: FRU help. We are keen to expand as much as we can. We currently have a small pilot project running at Nottingham Law School, where they are undertaking a small number of employment cases a year. We are in fairly advanced talks with Birmingham Law School and we have also been speaking to Manchester, although I understand some difficulties occurred there because of the last legal aid bidding round that did not turn out as we had hoped. We are trying to expand, but, as I said, this is going to be small numbers of cases overall and it is not the answer.
Q98 Chair: Have you had any discussions with any part of Government in the context of the consultation-either the Ministry of Justice or any other Government Department-about the role you might play if these changes were to go ahead?
Emma Baldwin: I don’t believe so.
Rebecca Scott: We have responded to the consultation paper. We would like to make the point that all these law centres and charities that you rely on as an alternative do require funding. It is a small amount of funding, but they need an infrastructure and they need to be well organised. The law firms that volunteer for us say they will only participate if it is a well-organised scheme that is funded and has an infrastructure. They are not going to spend their time on pro bono work if they are not committing to a scheme that is well run and funded. All pro bono agencies are under threat of funding at the moment. The Financial Inclusion Fund was abolished last week, and seven of our debt advice workers were immediately made redundant. The image that we are all going to step up and fill the gap is dependent on funding. A lot of that funding is legal aid funding or Legal Services Commission funding. We are under threat just as much as legal aid firms.
Emma Baldwin: Charitable giving is also under threat. Since the credit crunch we are one-and-a-half trainee solicitor posts down in the office, where firms used to send us a trainee solicitor for part of their training contract. We are one-and-a-half down already, so there is already a contraction because of the wider economic situation.
Sally Denton: If we look in Nottingham, if these proposals go ahead, then in terms of welfare benefits and debt there will not be any specialist providers because they are all Legal Services Commission funded. Generalist advice is local authority funded. The county funding has all gone. The city council is not going to provide additional funding to meet that gap; if anything, it will cut its funding. These are not clients that can afford to pay for advice from private practice firms. It is not the type of advice that is attractive in terms of CFA arrangements. In terms of advice through supporting people and tenancy support, that is all going too. If we are not there, there is not going to be anybody else.
Q99 Chair: When you talked about debt advice you said that there would not be any debt advice. You would not be able to provide it because it is based on an LSC contract.
Sally Denton: There won’t be any specialist debt advice; exactly. Similarly, the specialist debt advisers in Nottingham are all the people, for example, who are DRO accredited intermediaries. So they will go. In terms of that as a solution to people’s debt problems there won’t be advice for people in relation to that.
Q100 Claire Perry: But there will still be provision again via CAB caseworkers who are trained often in debt and welfare issues. That is my understanding, and indeed it is in their submissions.
Sally Denton: The specialist advice from the CAB is funded by Legal Services.
Claire Perry: Exactly.
Chair: We are going to be talking to the CAB in the next part.
Q101 Claire Perry: Again it gets back to the Chairman’s point-I am not disagreeing with you, and this is clearly a huge problem-that there are levels or, if you like, gradations of debt advice. Again, often you reference people in chaotic situations who don’t have particularly tricky legal problems but have issues about sorting out what is a priority versus a non-priority creditor-and we have read your very good examples in the submission-which does not require a solicitor’s qualification to do that. That is what an experienced caseworker could do. The statement that there is no debt advice available is perhaps a bit misleading. There will be less funding for legal assistance with debt advice but there will still be debt advice available.
Sally Denton: It will not be funded debt advice.
Rebecca Scott: They still need paying.
Claire Perry: Yes, but only 15% of the CAB’s income stream comes from the Legal Services Commission.
Chair: We have the CAB in later, so we can ask them that question. Thank you very much, the three of you. We are very grateful for your help.
Examination of Witnesses
Witnesses: Julie Bishop, Director, Law Centres Federation, Gillian Guy, Chief Executive, Citizens Advice, and Paul Newdick CBE, Trustee, National Pro Bono Centre, gave evidence.
Chair: Ms Guy, Chief Executive of Citizens Advice, Ms Bishop, Director of Law Centres Federation, and Mr Newdick from the National Pro Bono Centre, welcome. We are very glad to have your help with our inquiry. I am going to ask Mr Turner if he would begin.
Q102 Karl Turner: Thank you very much, Chairman. Very generally, the Government are saying that legal aid must be cut and that it facilitates, as it stands, more unnecessary litigation. Generally, what would you say about that?
Gillian Guy: I think there are issues that have to be dealt with around the legal aid budget-we don’t deny that-because of the way it has grown over the years, but the issue with regard to where the cuts will fall is that early intervention and advice will cease to be given and that is very often the advice that stops matters going into litigation. Therefore there could be further costs as a result of stopping that early intervention as things go into court.
Q103 Karl Turner: It seems to me that the CAB have received a triple whammy: legal aid cuts, both in relation to scope and a real-terms cut; local authority cuts; and the elimination of the Social Inclusion Fund. What would you say about the implications of, putting it crudely, getting rid of the Social Inclusion Fund? How does that affect the CAB?
Gillian Guy: The principal issues we have through the bureaux are that there are, as you rightly say, three areas of cut coming our way. The difficulty is that they are seen in isolation and, of course, they have a cumulative impact. One of those is the legal aid, which is tantamount to 15% away from our bureaux. Another of those is local authority funding, of which at the moment we do not have a full picture. We only know about half of the local authorities for our bureaux. It is looking at the moment like an average of 10%, but it goes as high as 100%. Then we have the Financial Inclusion Fund, which itself is another almost £20 million. Together all of those cumulatively could impact to the tune of 45% on our bureaux. That is quite devastating in terms of the kind of advice that we can sustain when there is increasing demand.
Q104 Karl Turner: At the moment I think you have something like 400 bureaux nationwide. Am I correct about that?
Gillian Guy: Just under, yes.
Q105 Karl Turner: How many do you see surviving following the implementation of these proposals?
Gillian Guy: That is a very difficult thing to predict, because not all local authorities, for example, have yet decided on their budgets and their grant funding. We have heard from about half at the moment. As I say, our average is about 10%. On its own that would not close down bureaux, but when it gets as high as 100% then the sustainability of the bureaux has gone and there are a couple of cases already where we are having to close our doors to people’s general advice.
Q106 Karl Turner: In your answer to an earlier question you touched upon the early intervention. How important is that? Would I be right to suggest that it saves money long term?
Gillian Guy: It is certainly in our evidence, because we have done some research on this, that for every £1 spent in that early intervention and advice we can save the state generally between about £2 and £9. That is based on the data given on performance to the Legal Services Commission on positive outcomes and then the work that is done by research on what the adverse impacts are of cases not being resolved at that stage and going on into court. If we extrapolate those two things and multiply them up, we can come to that figure quite robustly as a saving to the state as a result of early intervention.
Q107 Karl Turner: So you say the proposals at the moment are not correct.
Gillian Guy: I say they are a false economy.
Q108 Karl Turner: How many law centres do you see surviving? I think there are 56 nationwide at the moment.
Julie Bishop: My answer would be fairly similar to Gillian’s in that we do not know the full extent of local council cuts, but I have prepared today-and I can leave this behind-the impact of the announced funding cuts on law centres right now. With regard to the announced cuts from the legal aid budget, before you factor in the telephone gateway of 55% of law centre funding, out of a budget of £8 million, over £5 million will go. That is the announced scope cuts. But, if you add in the impact of the telephone gateway where it is foreseen that 80% of clients will go through that gateway and may not reach what is left in scope, it could be almost 90% of that funding.
In terms of the multiplier effect, law centres receive over 30% of their funding from local authorities. Similarly, that changes around the country, but we estimate more than that, because many law centres have already been notified of their loss. Hammersmith and Fulham, for instance, have already lost £180,000, which is the full amount of their local authority funding. We also have another 10% of funding from other Government Departments, many of which are also cutting. We get 19% of funding from charitable and philanthropic sources. We estimate that we will be left, nationwide, with a maximum of 30% of our funding. How we continue services with that is something that we are working on now. However, it must have a significant impact to lose all but 30% of your funding.
In relation to your previous question about unnecessary litigation, I think the important thing and one of the themes that ran through the Green Paper was a view of the client that uses legal aid. That may be an average client, but my understanding is that neither the LSC nor the MoJ currently collects data on the nature of client and client disadvantage. They have certain demographic data but it does not give you a complete picture. For example, you can mention one disability, but many of our clients have multiple disabilities. As you know, there is a big difference between being deaf and blind and just being deaf. These are significant absences.
My colleague from Nottingham mentioned our client profile, but again I can leave this with you. Our clients are poor; they have lower than average educational attainment; they have poor literacy and numeracy; they come from non-English speaking backgrounds; and they have a higher than average rate of disability. We have a higher than average number of legal aid clients who are under 25 because we have specialist youth services. Almost 60% are women. Importantly, 45% of our clients only have access to pay-as-you-go mobile phones. Most do not use the internet to access goods and services, and many of them have substance abuse, mental health problems and lead chaotic lives. I mention that because you are talking about unnecessary litigation. Our clients are not the people who just want a few hundred extra pounds because they tripped over the gutter. We are talking about a very different kind of person.
Q109 Karl Turner: You have talked about the type of client. What type of cases would you be involved with?
Julie Bishop: Law centres cover the full range of legal aid, with the exception of criminal legal aid. As you know, it was through the work of law centres that legal assistance at police stations began, but we have since passed that on. We have a couple of law centres that do family law, but in general we do mental health, community care, welfare benefit, debt, immigration, asylum, public law-all the areas that are currently funded in civil legal aid. What is the proportion? I think the proportion of our work is indicated in the amount that is lost. Our biggest area of work currently is housing, employment and immigration. Immigration and asylum is second to housing and then welfare benefits.
Paul Newdick: If there is an assumption that some body or bodies will step into the breach and fill what looks to be an enormous gaping hole that is going to be created when no social welfare law legal aid provision will be provided, and if there is an assumption that that will be by lawyers doing more pro bono work, I have to disabuse you of that, I am afraid.
Chair: We will come back to that issue a little later in our questioning, if we may, much more specifically.
Q110 Karl Turner: That, Sir Alan, was about to be my next question. You do not foresee pro bono practitioners taking up the slack, then?
Paul Newdick: They can’t. The way that pro bono works in giving assistance to individuals is based on a very close relationship with the front-line advice agencies sitting on my right. Pro bono doesn’t just happen in a vacuum. As a charity that has been trying to provide this infrastructure for the last dozen years or so, we recognise that the people who know best about where the need is and where legal help is best provided are the voluntary sector organisations. They have become increasingly dependent on legal aid funding for their survival. If they don’t survive, pro bono won’t survive. Lawyers demand a level of administration and service if they are going to give their time for free, and that is what LawWorks does. We have put that infrastructure in place, but the service is provided through the advice agencies, through clinics, which operate usually in the evenings but often at other times of the day with volunteer lawyers. If there is no clinic, the lawyers won’t do it.
I do need to tell you that the sorts of lawyers who get involved in pro bono have lots of other enticing areas of pro bono activity in which they could get involved: often international, saving the world or people in other jurisdictions. This is not the most glamorous end of pro bono provision but LawWorks feels fundamentally that we need to find lawyers who are willing to provide that service. But they can only provide it if there is an infrastructure within which to deliver it.
Q111 Karl Turner: What will happen to these clients then? Does it ultimately mean that the system is likely to collapse? Where are they going to go?
Paul Newdick: There will be nowhere for them to go, in my view. If CABs close and law centres close, where else are they going to go? I think MPs surgeries are probably going to have very large queues outside them going forward, because what else is there left? Private practice law firms, which of course are the ones that are providing the pro bono assistance, are not going to allow these people through their own doors. They do this as an adjunct to their normal daily activity, so I don’t think there will be anywhere for them to go.
Q112 Elizabeth Truss: In the last session we heard about some of the cost drivers of legal aid spending. Given that we do have the highest legal aid bill per capita in the world, I am interested to know this. You have said that the majority of people that access services tend to have chaotic lifestyles and low educational background. Do you think the main driver of legal aid expenditure here is social issues? What are the drivers within the legal system itself for what is making our legal aid bill so high? The third part of my question is, what would you do, both outside the legal budget itself and within the Ministry of Justice budget, to reduce that bill?
Gillian Guy: There are several drivers. I think to aim first and foremost at the early intervention and advice, as I have said before, is a false economy because it brings its own costs. One of the drivers, for example, is high-cost cases. They take an inordinate amount of court time, and I think the court process really does need to be looked at, which is another part of the Ministry of Justice. There are administration savings to be had in the legal process generally, particularly criminal, where a lot of the legal aid budget goes. There is an enormous amount of bureaucracy-and any of us who have been on the receiving end of this can testify to it-around the way in which legal aid is currently administered. There is much-I think there was £350 million accounted for last year-that could be taken out. There are perverse incentives in the system to go forward to litigation. There are incentives for lawyers to take court proceedings in order to get certificated clients, and that does not help in the backlog that goes through the court process. I think there is also probably insufficient preparation of any alternative disputes provision. It is right that there are alternatives to court, but they are not necessarily available right now and therefore ought to be put in place before early intervention is looked at.
Q113 Elizabeth Truss: Do you see that happening in other countries? Are we behind the international curve on this?
Gillian Guy: I think we are different from the way other countries deal with it. It is often said to us that we are the most generous in terms of our legal aid budget. The fact that it is not cleverly administered, though, is not an excuse or should not cloak that. We should look at it for how we are and perhaps learn from other countries in the way it is administered, but certainly alternative disputes are much more successfully handled elsewhere.
Julie Bishop: In terms of the cost drivers, again my colleague from Nottingham mentioned that 42% of clients who walked through our door were the result of errors elsewhere. We need to elaborate on that a little more and say that in December 2010 the National Audit Office found that the DWP had made no improvement in their error rate since 2007. When we are looking at cost drivers it seems not to be the correct place to look at the victims of those errors that are happening elsewhere. Many of the cost drivers are outside of the Department. The second point to make is that social welfare law-the law of the people that we represent, which we call "the law of everyday life" or, rather, in most other countries they call "poverty law"-is a very small part of the legal aid budget, and yet it represents, I think, £274 million of the proposed £350 million cuts. We believe that if you are going to cut you don’t focus on the poor for 70% of the cuts. However, what could you do? An obvious thing is that there appears to be, as Gillian just said, looking at alternative dispute resolution or looking at maybe tightening the merits test to include whether or not a person is able to represent themselves. There are probably other ways to tighten the merits if you want to try and ration legal aid rather than removing whole areas of it. The third thing to say is that, even if you want to take away £500 million from legal aid, you are still left with £1.6 billion. You must be able to have a legal aid system that includes civil legal aid and legal assistance for the poorest and most vulnerable members of the community once you have £1.6 billion.
The other problem in relation to that is that the rationale for the cuts being projected has been in relation to how much we can cut of A, B, C and D. Yet nowhere within that document is anything talking about what works for the client. How can we design a system that will produce benefits for society as opposed to just cutting spending? I think with £1.6 billion it would be possible to reshape the legal system, not through the lens of cutting but through the lens of a client, that still allows some of that £1.6 billion to be spent on the poor.
Q114 Elizabeth Truss: What specific suggestions would you have about how the process could be streamlined at the same time as reducing the bill? Clearly it is not delivering efficiently, is it, if you look in comparison to what is being delivered elsewhere, although I do think Britain does have a particular social issue and low educational attainment is a problem here? But I am sure there are issues within the legal system that can be addressed.
Julie Bishop: At the LSRC conference in June last year a paper was presented by someone from Holland that was very interesting. I could get you the citation. It talked about the most effective way to spend €1,000 in relation to achieving access to justice. The result of that was that €1,000 would be spent in simplifying court processes, and it was an across Europe study. Again, previously someone mentioned court processes. That is one mechanism for streamlining. One of the cost drivers for representing clients is completely out of their control. If you take immigration, the Home Office can take years upon years before they settle the case. There are inherent costs involved in keeping that matter open over that seven-year period. Once again, the cost drivers for the poor-the people we are representing-are completely out of our hands. That streamlining must be done with a view to the MoJ in its entirety.
Q115 Elizabeth Truss: The MoJ say that that is what they are working on. Do you see any signs of that, or is it not radical enough?
Julie Bishop: I think that many of the cuts within the Green Paper will actually increase MoJ costs.
Q116 Elizabeth Truss: Sorry, I was asking you specifically about the streamlining of court processes. Do you see signs that that is under way?
Julie Bishop: The current family law review could well link to a lowering of costs. Indeed, we would ask the question: why are you proposing costs before you know the solution? I would suggest that in family law there are many efficiencies and even better ways of resolving family disputes than what happens now, which is quite costly. One would assume that some of those will come out of the review of family law.
Paul Newdick: The streamlining processes are not going to help people who don’t understand how to operate the system in the first place. The idea that people will manage on their own without any assistance-
Q117 Elizabeth Truss: That is not what I am saying. I am saying that, if you were to propose alternative ways of making savings in the MoJ budget, how would you do it? If streamlining is one of those, what would that mean?
Paul Newdick: There is an area in terms of access through both telephone and electronic means which, I think, can streamline and save costs, but it does require some joint working. It requires the voluntary sector, the Government and the pro bono sector to work together to try and achieve that. So far we have not managed to do that with the Ministry of Justice and we would like to do so. There are ways of streamlining which will save costs.
Q118 Chair: I am interested, Mr Newdick, in whether you thought that courts, and particularly tribunals, could do more to make it feasible for people to represent themselves by taking a more inquisitorial approach and making it clear to the people in front of them what information it is they need to provide.
Paul Newdick: As a practitioner, because I am a practising lawyer aside from my role as Chairman of LawWorks, I think the amount of regulation and the complexity of law which faces most citizens is very, very difficult for a tribunal to suddenly make simple and easy for them. One only has to read an employment tribunal decision to see the complexity of it. I don’t think the tribunals themselves are going to help simplify issues. They could intervene in terms of trying to get earlier resolution of disputes, and certainly mediation, which is not a topic we have touched on yet. In terms of early intervention and resolution I think there is something there that could be investigated which could achieve more savings in terms of court time.
Claire Perry: Might I just focus some questions to Ms Guy? I would like to pay tribute to the work the CAB does. It is an enormous resource across the country and I am very concerned because I think there is a perception that you will be stepping up, if you like, to use the language of Mr Newdick, to take some of this responsibility.
Chair: Could I defer you in that case, because we have a group of questions about CAB and I would rather take them all together, if I may?
Q119 Yasmin Qureshi: My question is in relation to the suggestion about whether the tribunal members could help in the resolution process. Is it fair to say that most of these welfare and disability tribunals seem to have lay people as the adjudicator?
Paul Newdick: My own personal experience is with employment tribunals, where the employment judge is legally qualified. I had understood that most tribunals have a legally qualified person on the panel; it is not just lay people.
Julie Bishop: One of the other things in terms of tribunals is that 60% of people who are represented at tribunal do reach a settlement. Those are ACAS figures. If we are talking about streamlined processes, you could argue that representation decreases costs. The second thing to say in relation to that is an issue of equality of arms. Our people may go along, and even if they are not represented, a law centre will have prepared witness statements and assisted them with working out their cross-examination, etc., but we have not had one case of an employer that is not represented by a barrister. I cannot give you a case. Prior to this I bothered to try and find out. There could be one, but nobody could present one. I think the issue here is not about lay people and how simple the system is, but does the British justice system believe in equality of arms? Does this Green Paper seek to destroy equality before the law? Is this what we are up to? If you are saying that the majority of people are able to represent themselves, well, say that to the employers; say it to the DWP; say it to the Home Office; don’t just say it to us.
Q120 Chris Evans: Ms Guy, looking at your submission here, your evidence states that for every £1 of legal aid expenditure on advice, somewhere between £2 and £9 is "potentially saved" to the state. Can you explain how these figures were calculated, please?
Gillian Guy: I can certainly give you our methodology. I referred to it slightly earlier. The first thing we took was the Legal Services Commission outcomes data that they require as part of their performance management of the contracts. We then get an understanding of where there are positive outcomes to the legal help that is given and where there are not positive outcomes, so that either disappears or goes into the court process. We then took the Legal Services Research Centre research, which looked at the adverse consequences and costs of those cases that did not reach, and would not reach, positive outcomes. We took those two and put them together through an economic model which looked at the kind of costs in terms of housing and health that ensue, and indeed court cases that ensue, as a result of that early advice not being successful, and then multiplied that up. That gave us a figure of a £1 investment bringing forth between £2 and £9 saving to the state.
Q121 Chris Evans: The Green Paper says that less costly alternatives need to be found to using lawyers and the court system. What do you envisage those alternative options would be?
Gillian Guy: The alternative options do rest on the kind of alternative dispute resolution that we have been talking about, and also mediation. We would not be advocating that the alternative is litigants in person, for the reasons that my colleagues have just expounded. We think that adds to costs in the system, because it takes longer for a case to go forward, and we do think there is inequality bound up in that. I think it would be about looking at alternative methods. I have already spoken about a way of taking costs out of the system. Just to hark back to an earlier question, one of the reasons that costs do not come out of the legal system is because it is not one system. It is a variety of systems with too many vested interests in it. What it needs is a cohesive review that brings some savings out. That is the only way to get streamlining.
Q122 Chris Evans: I am looking at your submission again. At point 9 you publish a table with categories. You say: "What this table very clearly shows is that the proposals, as well as reducing the volume of publicly funded cases overall, will shift the balance of public funding away from early advice." How important is early advice in reducing costs, and do you think the MoJ is missing a trick here?
Gillian Guy: The figures that have been given by the MoJ vary, which is unnerving. The figure that we’ve taken is that 97% of the early advice will be hit. So 97% of that intervention will be hit, which is in organisations like those represented before you today. Obviously the cost that we see arising from that is that that £1 has gone and therefore the saving of between £2 and £9 has gone for every one of those pounds. That amounts to a large loss of saving.
Q123 Chris Evans: Have you made any estimate of the amount of cases that won’t be resolved at all if these proposals go through?
Gillian Guy: They will be those people who have nowhere else to turn. It is the point made earlier really. If the advisers are not there, there is nowhere to go. They won’t necessarily suddenly find the wherewithal to go and represent themselves in court. They won’t find the wherewithal to go and get legal advice. They may find that they are cornered into going, particularly in terms of debt, to debt management agencies, where we know that people are very often exploited as a result of that. For example, some 40% of any recovery that happens in benefits is taken away from them by those agencies. I would rather, as an organisation, not leave them to those kinds of devices but offer them advice that enables them to get the benefits to which they are entitled.
Q124 Chris Evans: I know it is outside the scope, but I am interested in financial inclusion. Do you think doorstep lenders and moneylenders are now going to thrive if these proposals go through?
Gillian Guy: The difficulty is that when people are vulnerable they can be taken advantage of. When other people have a commercial interest in doing that, it is going to happen. What we like to do is to be able to prevent that, give that advice and make that intervention. That is what is under threat at the moment.
Q125 Claire Perry: To continue where I was going with the CAB analysis, you polled about 100 bureaux, which is a relatively small percentage of your 3,300 outlets, specifically on the 15% withdrawal of legal services funding. There was, in a way, quite a disproportionate response. 51% of the bureaux you polled said that there would be a risk to their continuation as a result of that. Do you feel that would be represented across the whole picture if you polled all of your outlets, or do you think that was perhaps disproportionate based on those who were responding?
Gillian Guy: We have to compare the right figures, first of all. It is not 100 out of 3,000 plus. It is 100 out of just under 400, so that is a quarter of our population of bureaux, because the outlets are obviously multipliers of the bureaux. That is the first thing. That is about a quarter. Those figures were about legal aid expenditure and the impact on those bureaux of that.
Q126 Claire Perry: It was 15% of the national budget.
Gillian Guy: Exactly so, and that isn’t equally spread across the bureaux so it would not be all 400 that were impacted anyway. It is 100 out of an even smaller figure than that. The next point, as I made earlier, is there is a cumulative impact on those bureaux as well. In terms of financial inclusion funding, £19 million is currently under threat to go by the end of March and over 300 workers are currently serving their redundancy notice out. They will go and that specialist advice will go. There is also the local authority funding, on average, as I say, of 10%. We have seen some of the impact of that, but it does mean that some of the general advice won’t be there as a back-up either.
Q127 Claire Perry: You referenced, I think, if I may add, that the overall picture was looking rather worryingly as if is a 40% reduction if you add up all of these various reductions. When was the last time your budget was that small? Where would that take funding back to relative to your history?
Gillian Guy: I said 45%. I don’t have a date; I can’t tell you that. If it is a point you want me to address, I will.
Q128 Claire Perry: What I am trying to understand is this. I don’t know the numbers but, for example, the financial inclusion money, which is a very good project, is a relatively recent addition to the CAB budget. I suspect, like all budgets, there has been quite a lot of inflation of these budgets over the last decade or 20 years. What I am trying to understand is, within the picture of looking back historically, what did the CAB do with what amount of money five or 10 years ago? What we are trying to understand is how resilient is this fantastic service. What is the leverage in this service for getting in volunteer caseworkers and people who can assist, so that when we make a submission we can understand what the likely outcome is as opposed to the Armageddon outcome, which none of us would want? Whether or not you are able to provide numbers that look at this budget relative to your historical data, it would be extremely helpful to know relative to your historical picture what this budget cut might look like. Might you be able to supply that to the Committee?
Chair: You are most welcome to let us have that information later.
Gillian Guy: I would be very happy to provide that information. What I would like to add to that information is the increase in demand for the service that we provide. The pockets of money that you are referring to, quite rightly, such as the Financial Inclusion Fund, came out of another change in the circumstances, which was a recession and the need for 70,000 people every year through that Financial Inclusion Fund to come just to CAB for advice on their debt management, because they are getting into situations where they will be homeless, repossessed, and have to move their children from schools, and suchlike. Those specific issues have changed historically as well.
Q129 Claire Perry: I do understand that, but my understanding was that the Financial Inclusion Fund became policy prior to 2007. It was certainly on the policy mix prior to the 2007 recession. Again, one of the issues we have in the Committee is, what is it that has changed so fundamentally about Britain? Is it the complexity of benefit law? Is it the social issues to which my colleagues refer? What is it that is so unbelievably complicated that we now need to be spending more money to tackle the problems? Clearly we would like to tackle the cause rather than the symptom. We would all probably prefer to do that.
Gillian Guy: I think it is all of those things. In the Citizens Advice movement, if you like, what we are trying to do is tackle the benefits system, to try to take that out of its complication.
Q130 Claire Perry: I know you support the simplification of the process.
Gillian Guy: We do indeed, and we are working with Government to try and make sure it works first time as opposed to picking up problems later. It would suit our purposes if people did not need as much advice, but the situation we are in is that they do. Until those steps are taken what we don’t want to do is withdraw the advice.
Q131 Yasmin Qureshi: Finally, if the MoJ has its way, a number of areas which currently receive legal aid will be taken away. How do you feel? Are there current systems in place or places which could step in and do the work that other centres used to do? Are there viable alternatives at all in the system for those areas of law which are no longer going to be legally funded?
Gillian Guy: I don’t think there are free alternatives. That, in a sense, is the conundrum that we are in. The fact that something comes out of legal aid expenditure and is no longer financed means that either some other department has to pick it up as a social issue or it doesn’t get picked up at all. The alternative for these people is not, I would submit, to go and pay for legal advice because that is what led them into the situation in the first place. They also value, I would say, independent advice. I know that the Green Paper talks about things like Jobcentre Plus being able to give advice. Apart from the fact that they are not in the business of doing so, because they give information, they are not necessarily the first place that people trust when they are looking for that advice and I have not noticed that any extra money is going into Jobcentre Plus to enable them to do that. I think the conundrum is that it is not free. Volunteers are not free. We could double our volunteer workforce by campaigning for volunteers to come forward, and we are very lucky that they haven’t all drifted away, but we have to pay to manage that, to supervise that, to make sure that they are trained and to make sure that they have the information that people can rely on. So I don’t think there is a free place to go.
Julie Bishop: Just to add to what Gillian has said, in the past, Government has contracted with agencies like ours because we provide more than just the £1 that you get. As Gillian said, they have done some costings. We also commissioned a savings document a couple of years back where we found that for every £1 spent at a law centre it resulted in £10 of additional benefits. The point I am trying to make is that when a client comes to a law centre or a CAB, we are dealing with their legal problem but we are part of our local community. They come to us mostly because their neighbour or someone else has said, "Come here." They are not people who look up the internet and say, "Oh, I’ll find my law centre." A community member or a relative has brought them to us. We are then able not just to address their legal problem but to plug them into other support mechanisms that can help them in their life. At a time when there are major changes happening across Government, across policy programme, at the heart of a lot of that is personal responsibility and self-reliance. They often need to start somewhere. They need to start at a trusted organisation.
We may be dealing with a legal problem but, in fact, we are a key part of that path to people getting back on to self-reliance and being responsible for themselves, being plugged more effectively into their local community and into other support. We would argue that, in taking away a cost saving for a legal matter, you are actually taking away a lot more. You are taking away all our connections. You are taking away all the other money we leverage. At Law Centres, for instance, clearly we are madly thinking at the moment how we survive these cuts. We are in talks with everyone, but I need to tell you-
Q132 Chair: Just on that point, you say you have talked to everyone. Have any of your organisations had any discussions with Government Departments, not just the Ministry of Justice, but the Cabinet Office or indeed the Departments that generate the problems like the DWP, for example? Have any of you had approaches or been in talks with them about what happens if all this goes through?
Paul Newdick: Not in relation specifically to the Green Paper, but as LawWorks has lost its funding from the Ministry of Justice we have been attempting to talk to other Departments in relation to the work that we do. So far we have had no positive response at all.
Could I comment on what would be left? What we are talking about here is a dismantling of an infrastructure which has fantastic leverage. You lose all of that if the infrastructure goes. We are talking about people who do this sort of work because they are very committed to it, and they give more than their job’s worth in terms of the work that they do. Also they can leverage to obtain a massive amount of free legal advice which would not otherwise be available. Through LawWorks we deliver something like 40,000 pieces of advice a year, but we have to do it within the infrastructure because there is no other way of delivering that. That will go at a stroke. There are many other instances of where the infrastructure disappearing will mean that there is no ability to leverage other help and assistance which is free.
Gillian Guy: I just wanted to come back on your question, Sir Alan. We have had talks with other Departments because, as members of the Committee may know, as an organisation we wanted to do that as soon as the comprehensive spending review was thought of, to try and get some cohesion for how that would impact on people, particularly our clients. I would say that we have had open ears to talk about things. We have talked about the reform of the benefits system. I think we have been welcomed in terms of giving some input to that. The difficulty is in getting Departments to talk to one another, not necessarily to us, because there is a holistic approach required here. In terms of early intervention, to save those problems arising in the first place, we as an organisation are trying to get into prevention as well as cure and the Government would be well placed to try and do some of that as well. I can understand an argument that says, "This isn’t just the MoJ’s issue." I have some empathy with the argument that says, "If we are going to sort out legal, aid then maybe this is a social issue that needs to be picked up somewhere else." But that somewhere else has to be identified, and that is a Government-wide responsibility.
Q133 Karl Turner: Finally, would it be an outrageous, over-the-top, suggestion for me to make that, collectively, you are fearful that the system really, really will collapse if these proposals go ahead? Is that outrageous or not?
Chair: That could be called a leading question, but have a go.
Paul Newdick: It already is. There is talk about, "How is it all costing so much?", but you have to remember that civil legal aid has gone down. The legal aid bill goes up but it is because of criminal legal aid. Civil legal aid has gone down. I have seen several law centres that have had huge difficulties as a result of the way the payment through the LSC has been made. There are many that have already closed and there are some very much on the brink of closure, even with the funding as it is now. I don’t think there is any doubt that this will disappear as a service if these cuts take place.
Q134 Chair: Ms Bishop, you said earlier that you were looking at every possible way of surviving?
Julie Bishop: We are, indeed. I think law centres commenced 40 years ago because this service was not available. They were helping people who were working with unscrupulous landlords. Indeed, there will be this need again if these cuts come through. When I was saying we were talking everywhere, we were of course talking to law firms and to other philanthropic agencies to work out to what extent it is possible to go back 40 years. What will be left for us to do? What sort of service are we going to be looking at? I would suggest that some law centres will certainly survive, but they won’t be picking up what I would regard as the Government’s responsibility to serve the poor. We will be a stop-gap measure; we won’t have the impact that we have now.
There was a question earlier about costs as well. There is something I just wanted to add to that. An example of costs within the MoJ is that education at a cost of £1 million is seen as coming out of scope. Every young person who is excluded from school-one young person-costs £68,000 to Government. More importantly for the MoJ, 72% of prisoners have been excluded from school and only less than 10% of students are excluded from school. That saving of £1 million within the MoJ itself is going to have dramatic costs within the MoJ. There are these areas we are looking at that we are representing that we believe are a wanton waste of Government money. We don’t believe it is a way to streamline. We think it will cause greater rises in costs within the MoJ.
Q135 Chair: And CAB?
Gillian Guy: Just going back to whether a question is outrageous or not, we are not in the business of shroud waving and saying that the Citizens Advice movement is about to go completely out of existence, because we will fight tooth and nail to retain it because of its importance in the social fabric. I hope that people will join with us in doing that and have some confidence in that.
I think there are some unforeseen consequences and impacts here-I have termed them false economies-that need to be looked at, and looked at very seriously before it’s too late. The costs will come down the track. We appreciate, as a responsible organisation, that there is a deficit to be dealt with. We appreciate that there are cuts to be made, but just looking at the cumulative impact of those and the costs that they will generate seems to us to be very important indeed. Remember that the cumulative impact seems to be hitting the same group of people time and time again, so their situation will worsen. We think our demand will increase and continue to increase as a result of that.
Chair: Thank you very much to the three of you. The Committee is very appreciative of the valuable evidence we have had this morning. Many thanks.
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