Family Law: warning that proposals will result in 'huge hidden costs' for lawyers

Family solicitors this week slammed proposals that will 'do away with legal aid for ancillary relief by the back door' and result in 'huge hidden costs' for lawyers, by obliging individuals to seek a loan to pay for their legal expenses rather than making a contribution towards their legal aid bills.


Under Legal Services Commission (LSC) proposals to be introduced in October this year, clients who would currently face a contribution of £60 or more will be expected to take out a private loan to cover their legal costs instead.


The plans, which are the subject of a consultation launched this month, are based on the assumption that an amount of £60 per month would service a five-year loan for £3,000. Clients will have to prove that they have been rejected for a loan by several mainstream lending institutions before they can receive public funding.


Christina Blacklaws, chairwoman of the Law Society's family law committee, said: 'What is proposed will effectively be doing away with public funding for financial matters in family cases, because it will exclude it if you have anything at all to argue about.


'If an individual has more than £481 pounds a month left after tax, national insurance and housing costs, then they will have to prove a negative - that is, that they cannot be given a loan. That will involve a plethora of forms, huge delays and extra hidden costs for solicitors who have to do it all for a tailored fixed fee. It is removing legal aid for ancillary relief by the back door.'


David Emmerson, legal aid committee chairman at Resolution, said: 'The current method of assessment does not take into account what level of debt the person is in anyway, apart from their mortgage. So if they are considered able to afford the £60 per month contribution, that does not mean they can afford a loan.'


He added: 'Most solicitors are not in a position to offer financial advice, and this is what we will be expecting them to do.'


Legal Aid Practitioners Group director Richard Miller added: 'No client who is poor enough to qualify on income grounds for legal aid should be required as a matter of public policy to put themselves into debt - or, more probably, further into debt - in order to meet necessary legal costs.'


An LSC spokesman said: 'We will need to exercise the new powers with great care - we are not in the business of forcing people into unaffordable borrowing. Where private funding is a realistic alternative for clients, it should, of course, be used.'