Legal aid cuts 'could cost £139m', report finds

Removing legal aid from family law, social welfare and clinical negligence could cost the government £139m, a report by King's College, London, has found. The government aims to save £240m by making cuts in these areas.

Dr Graham Cookson (pictured), the report's author, said his research for the Law Society 'undermines the government's economic rationale for changing the scope of legal aid'.

In the case of clinical negligence, Dr Cookson estimated that the government would actually lose £18m by implementing the bill and the Jackson reforms, through greater costs to the NHS in legal fees and damages.

He said a major source of knock-on costs would be the ATE premiums for experts' fees and reports, which will continue to be recoverable for clinical negligence cases.

Dr Cookson estimated that this could cost the NHSLA £12.9m. Meanwhile, the cost to the government of adopting the Jackson report's recommendation and increasing general damages by ten per cent across the board he assessed at £15.6m.

'Overall, the knock-on costs are estimated at almost three times the predicted savings of £10.5m per annum,' Dr Cookson said. 'Based upon this analysis the bill would generate a net loss of approximately £18m per annum for the government, which would largely be borne by the NHS through the NHSLA.

'While opposition from lawyers, patient representatives and ATE insurers may be expected, it is important to note that both Lord Justice Jackson and the NHSLA have both registered opposition to the removal of legal aid for clinical negligence. Based upon the analysis presented in this section, there is certainly no economic justification for these changes.'

Dr Cookson said his report calculated that the annual net saving to the public purse of removing family, social welfare and clinical negligence from scope would be £100m, or 42 per cent of the saving predicted by the government.

Dr Cookson said the largest single area of increased cost was mediation, at £26m per annum. More generally litigation costs would go up by £45m, including £7m for increased numbers of litigants in person, and the cost of providing 'alternative advice services' would rise by £53m.

He attributed a further £7m to 'court fee remissions for previously legal aid funded clients'. He described the planned telephone gateway for civil legal aid cases as the 'cheapest solution proposed by the government' at £8 per call.

Des Hudson, chief executive of the Law Society, said: 'The society accepts the need to achieve savings, but this report confirms that much of the Ministry of Justice's claimed savings are being achieved at the expense of other parts of government.

'This is kamikaze accounting and will do little to tackle the deficit while sacrificing access to justice. Should we be promoting our justice system internationally while denying access to ordinary citizens?'

A spokesman for the Ministry of Justice said: 'We have been clear that the costs and benefits detailed in our impact assessment are our best estimate of the potential effects of the reforms. The report has attempted to estimate the broader 'unintended' impacts of the reforms based on a number of assumptions for which there is limited evidence.

'In addition, the report does not place a value on some of the likely benefits, for example fewer cases coming to court through increased levels of mediation. It also contains factual inaccuracies about the methodology employed in our impact assessments; for example, it is stated that the impact of exceptional funding cases have not been taken account of in savings calculations, which is incorrect.'