Legal aid practitioners this week slammed Legal Services Commission (LSC) proposals that they say will effectively exclude all homeowners from eligibility for legal aid and could force many firms to abandon this work altogether.

Responding to an LSC consultation on reform of the civil legal aid system, the Legal Aid Practitioners Group (LAPG) said the proposals would impose a significant bureaucratic burden on solicitors.


The consultation paper proposes abolishing the current rule that excludes the first £100,000 of equity in an applicant's home for the purposes of calculating eligibility for civil legal aid.


The LAPG warned that scrapping the equity disregard could force many firms to drop legal aid work because all family ancillary relief work - the 'last remaining factor' that keeps many firms within the legal aid scheme - would no longer be eligible for public funding. The vast majority of ancillary relief cases concern equity in the family home.


LAPG director Richard Miller said: 'To all intents and purposes this would exclude every single homeowner from eligibility for legal aid. It will exclude people with no liquid assets at all.'


He continued: 'The proposals will force solicitors to carry out a detailed calculation in every case, not just cases that come close to the equity limit.'


Mr Miller added that the consultation did not resolve the issue of joint ownership and would arbitrarily disadvantage those who have taken out a repayment mortgage rather than an endowment mortgage, where the loan is not paid off and equity boosted until the endowment matures.


Colin Ettinger, president of the Association of Personal Injury Lawyers, said plans to scrap the equity waiver would be a 'shackle' on claimants' access to justice. He said: 'It is already notoriously difficult to bring a claim against the NHS and this move will block access to legal aid for a huge portion of society.'


In its response, the Law Society said the plans would unfairly disenfranchise a large proportion of those currently eligible for legal aid and cause inequitable variations across the country.


LSC head of funding policy Colin Stutt said the LSC was under a duty to ensure the legal aid budget was properly targeted at the most vulnerable of society, and the equity disregard would not be removed without safeguards.