Innocent people are being left thousands of pounds out of pocket and even consider pleading guilty to help reduce their legal bills, a former magistrate said today.

In charity Transform Justice’s report, Innocent but broke – rough justice?, director Penelope Gibbs asks ‘why the innocent should be financially penalised’ and whether the government should reverse a policy that, since October 2012, enables those found not guilty to recoup only a ‘small fraction’ of their costs.

The report states that the budget for recompensing people who have been found innocent or whose cases have been withdrawn fell from £89m in 2013/14 to £44.2m in 2014/15.

‘Austerity demands cuts but many perceive this particular change to be against both justice and human rights, given that it has led innocent people to be financially ruined and is a strong incentive to plead guilty.’

Nigel Evans (pictured), former deputy speaker of the House of Commons, was cleared of rape in 2014 but left £130,000 the poorer, the report says.

Former News of the World deputy editor Neil Wallis, who was charged with conspiracy to hack phones in July 2014, considered pleading guilty to reduce his legal costs.

‘[Wallis] always maintained his innocence. He was eventually acquitted in July 2015, but could not get any of [his] legal fees back since he had paid his lawyers (Tuckers) privately,’ the report says.

‘Neil always hoped that News Corp would recompense him for his legal costs, but knew that he was likely to have to pay them himself and that they would amount to a considerable sum.

‘He considered pleading guilty just for that reason – his legal costs would be less and the process quicker.’

Wallis told Gibbs he ‘weakened, but not for long’.

The report recommends the government reinstitute a system where ‘reasonable’ costs are reimbursed to defendants who are acquitted or where the prosecution is withdrawn.

The ‘simpler’ system could have an online application and a ‘transparent menu’ of costs, which may be reimbursed. A set rate could be set, depending on the kind of case.

The report also recommends abolishing the need to apply for legal aid and have it refused as a pre-condition to getting any Crown court costs back.

‘[Defendants] who know they are ineligible for legal aid can find themselves in the invidious position of tracking down a legal aid firm, just to process their application,’ Gibbs says.

Some legal aid firms had started charging people around £250 to process their applications, Gibbs was told.

Other recommendations include ensuring more private payers get their costs back when court time is wasted through no fault of the defence, and making it easier for defendants to compare solicitors’ skills and costs.