Advice centres should look to legal expenses insurance to fund cases.
Historically, law centres and other advice providers have been slow to look at using legal expenses insurance (LEI) to fund client cases. But given recent changes to legal aid, the sector needs to consider alternatives.
LASPO put large areas of law out of scope, including employment claims (other than those relating to discrimination). Without other means of funding, many people have little chance of enforcing their legal rights. As legal aid contracts become more difficult to secure and local authorities reduce funding for not-for-profit agencies, there are serious concerns about the sustainability of providers and their ability to meet rising demand.
Many funders, such as trusts and private organisations, tend not to fund business-as-usual casework, preferring innovative bids that aim to tackle specific problems. The Legal Aid Agency already demands that LEI is explored as an alternative to funding, as this is a standard question on making a legal aid application. LEI could well be an alternative to funding access to justice but is generally overlooked.
I am a trainee solicitor at Avon & Bristol Law Centre and in my second year as a Justice First Fellow. The fellowship is run by The Legal Education Foundation (TLEF) and, as part of the scheme, fellows are expected to undertake a project aimed at increasing access to justice. I have looked into the viability of LEI as an alternative income stream for funding employment cases at the centre. Although LEI is no panacea, it could have a significant role to play.
I want to identify three test cases to see if LEI could be implemented long-term. The first is a claim for unfair dismissal with two elements of disability discrimination. Our client suffers from long-term disabilities and was dismissed by her employer after adjustments were recommended by occupational health. The client could not afford to pay for a solicitor privately and without LEI we would not have been able to provide the service that the complexity of the case demanded. LEI also enabled the client to fund disbursements such as counsel’s fees, which she could not have afforded and certainly would not be available through core funding.
Even if the matter had been within scope, legal aid funding is not paid at commercial rates. There is a difference of £106 an hour for chargeable work. A standard employment case, on average, requires 50 hours of fee-earner input, which could potentially be a loss of £5,300 in costs.
As part of its commitment to promoting access to justice, the foundation is also funding an LEI project at University House Legal Advice Centre. University House has managed to fund cases using LEI and it also provides training to organisations on how to run LEI cases. The one I attended gave invaluable insight into how advice centres can be more proactive in diversifying income streams.
Eddie Coppinger, director of University House, has said: ‘In a time of financial constraint, this approach provides both the client and an independent advice centre like us with access to a significant financial resource.’ The centre estimates it generated around £20,000 from LEI last year.
Other advice providers are also using LEI. Hillingdon Law Centre obtained costs of £3,000 in a case which would not otherwise be available through legal aid or core funding. In the not-for-profit sector, 10 cases a year at this rate could fund a solicitor post which increases organisational capacity.
LEI is generally sold as an add-on to household or motor insurance policies. As a result, many people will be unaware they have it, yet it could provide access to legal advice which they otherwise could not afford. Even if legal aid were available at pre-LASPO levels, there would still be large parts of the population who are ineligible but do not earn enough to pay private solicitor fees. By using LEI, advice centres would be able to provide assistance to the people who fall within this bracket.