Legal aid cuts spark insolvency fears

Lawyers have issued warnings over a wave of insolvencies across legal firms and charities, because of government plans to cut legal aid fees by a further 10%.

Fears were sparked by a proposal from the Ministry of Justice (MoJ) to cut costs even further, on top of the previous Labour government’s move to slash legal aid fees by 12.5%.

The MoJ is likely to encounter vast opposition when parliament resumes but on confirming the plans, it said the UK legal system was “the most expensive legal aid system in the world”.

The news follows the Immigration Advisory Service’s (IAS) placement into administration as a result of financial problems earlier this month. IAS was the largest provider of immigration law services in the legal aid sector.

IAS follwed the same path as Refugee and Migrant Justice (RMJ), another large charity which provided publicly funded immigration services. RMJ went into administration last year after getting into financial difficulties related to the legal aid scheme. It is thought that IAS had over 25,000 live cases (over double the number of cases that RMJ had when it was placed into administration).

Link to full article in “Insolvency News”