Law centres can charge clients
SRA's red tape initiative gives not-for-profit sector more flexibility
Law centres and other not-for-profit agencies employing solicitors can charge clients following the coming into force of the seventh version of the SRA Handbook yesterday.
The move coincides with the implementation of LASPO and cuts in legal aid, which had previously accounted for up to half of many law centres' incomes.
Previously law centres and other organisations had applied to the SRA for waivers to be able to charge, or set up community interest companies (CICs), as in Rochdale. Islington law centre applied to the SRA for an ABS license for its CIC in November last year.
Steve Hynes, director of the Legal Action Group (pictured), warned that whether law centres charged clients directly or through a CIC, there was a "limited" market.
He said there was some scope for charging for immigration advice and for employment, though tribunal awards were often quite low. He noted that some law centres had decided to specialise in discrimination cases, where awards were higher.
However, he did not know of any not-for-profit agencies charging for advice in housing, welfare or family cases.
"The bulk of law centre clients are on very low incomes and can't afford to pay," Hynes said.
Removing restrictions on charging were introduced as part of the SRA's red tape initiative.
Other changes brought in yesterday as part of the initiative include removing restrictions preventing in-house solicitors employed by local authorities from charging charities for legal services.
A second consultation on removing red tape will start later this month and report back in June. Any handbook changes resulting from this will be implemented on 1 October 2013.
The new handbook also introduces the ban on referral fees through two new mandatory outcomes, in chapters 6 and 9, which ensure that "you are not paid a prohibited referral fee" and that "you do not pay a prohibited referral fee".
The handbook's glossary defines prohibited referral fees, while 'indicative behaviours' illustrate how the outcomes can be achieved.