Plans to divert more legal aid funds to those most in need while delivering better value for taxpayers’ money are on track following the publication of the government’s response to a consultation on Crown Court means testing and Central Funds reforms.
The consultation to introduce means testing to Crown Court defendants comes over two years after the introduction of means testing in magistrates’ courts, which has so far delivered net savings of over £80 million.
Justice Minister Lord Willy Bach said:
‘The government strongly believes that those convicted of a crime, and who have been ordered to make a contribution, should pay some or all of the cost of their publicly-funded defence. In these tough economic times it makes sense that those who can afford to pay for their legal representation should do so.
‘The reforms we are making to legal aid ensure this happens, and are part of our promise to deliver real help now to those most in need, whilst developing an economically sustainable system that ensures fair and equitable access to all.
‘We have been listening to those involved in the criminal justice system and the general public, who in the majority support this approach.’
‘Every defendant who appears for trial at the Crown Court and submits a completed application will be granted legal aid. As part of the application process, defendants will be asked to provide information about their income and capital assets, to determine whether they are able to contribute some or all of their costs. The assessment will be very sensitive to individual circumstances, and take into account a range of actual expenses and cost of living allowances and individual family circumstances to establish disposable income. A hardship unit will act as an additional safeguard for those defendants who believe that they genuinely cannot afford to make any contribution.
Chief Executive of the Legal Services Commission Carolyn Regan said:
‘We have carefully considered the concerns of the public and professionals working in the system and have addressed their needs where we can. We are confident that the way forward will deliver significant savings enabling us to ensure the legal aid system remains sustainable in the future.’
The proposed reforms to Central Funds will mean that acquitted defendants who pay privately in both the Crown Court and the Magistrates’ Court, will have their defence costs capped at legal aid rates.
The reforms to Central Funds are estimated to achieve savings of between £22-25 million and will further enhance the sustainability of the legal aid budget.
The department will be consulting on draft regulations for Crown Court means testing shortly, and will continue to work with stakeholders on the detail of the scheme, before it goes live in five early adopter courts in January 2010.
Statement on civil legal aid
Lord Bach also made a statement on civil legal aid:
‘Members of the public who receive civil legal aid for a money or property dispute, and who succeed in obtaining a financial benefit from their case, are required to repay their legal aid costs, so resources can be recycled to help others.
‘If someone is unable to repay their legal aid costs immediately, these can be postponed as a statutory charge on their property. Where charges are postponed against property, persons are not obliged to make any repayments, or to repay the charge in full until their financial circumstances change, or the property changes hands. However, in order to encourage clients to repay their postponed charge where they can, the charge accrues 8% simple interest. Although the interest rate on postponed legal aid charges is entirely separate from the bank rate, the government has been considering whether the existing interest rate should be changed.
‘The government has decided that the interest rate should remain at 8% simple. The simple interest which accrues on the legal aid charge is entirely different from the compound interest charged by commercial institutions. For an average statutory charge which is repaid after seven years, 8% simple interest is approximately equivalent to 5.3% compound interest. We consider that this compares favourably with other commercial alternatives, particularly for the majority of clients who receive legal aid, who could be charged high compound interest rates by commercial lenders.
‘There is also no requirement to make regular repayments against the charge, unlike commercial products. Funded clients will also benefit from lower legal costs, as their lawyers will have been paid at controlled legal aid rates, which will significantly reduce their legal costs. Taking all of this into account, we consider that the charge should remain at 8% simple interest to encourage those who can repay to do so. This is important because when legal aid charges are repaid, this money is recycled to provide legal help for others. For example, lowering the simple interest rate by half could deny civil advice to 30,000 people per year.’
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