Small firms at great risk, warn MPs

Small high street firms and law centres are at great risk from the effects of covid-19 restrictions, MPs have warned.

The justice committee has published a report on the impact of covid-19 on the legal professions from 16 March to 30 June 2020 and urged government to take action.

The committee said that the government’s financial support “cannot compensate for the significant drop-off in the amount of work being done and remove the risk of a collapse in legal services providers”.

It noted that legal aid firms were already under stress before covid-19 but acknowledged that the Legal Aid Agency (LAA) has made helpful changes, including making it easier to claim interim and hardship payments and aligning some fees for remote work with those for in-person work.

It also put a pause on pursuing outstanding debts.

MPs said it is important the legal professions properly represent the society they serve and that they are “in good shape to deal with the increase in demand for legal advice and representation that is on the horizon”.

It urged the Ministry of Justice (MoJ) to consider Law Society proposals for payment and repayment of monthly payments to firms and law centres; and to also consider further grants for law centres and other not-for-profit legal services providers who are at risk of collapse.

The MoJ should, MPs said, report back to the committee and if such grants are not provided, set out what provision it will make for users of law centres that cease operations.

It also urged both the MoJ and the LAA to be “be creative” as to how legal aid is administered to avoid further damage to the legal profession.

The Law Society, which recently warned that more than 60 per cent of high street firms feared they would have to close later this year, welcomed the report.

Society president Simon Davies said: “We echo the sentiment that legal aid lawyers need support now or they may not be there when justice is needed in the future.”

He said young practitioners and those from black and minority ethnic (BAME) backgrounds have been disproportionately affected by the pandemic as they often work in publicly funded areas of law.

“Time and time again”, he added, “the Law Society has warned that the beleaguered legal aid system is reaching breaking point and more government investment is needed… It is vital that the wheels of justice continue to turn.”

He said government must heed the calls of both the select committee and the Society to support legal aid firms through the crisis; and must commit to increasing legal aid fees and updating the means test.

“Without action”, he warned, “more and more members of the public will find themselves priced out of justice and unable to enforce their rights.”

Professor Chris Bones, chair of the Chartered Institute of Legal Executives (CILEx) said the contents of the report “should not be a surprise to the government” but added: “I hope that hearing it from the select committee will galvanise the Ministry of Justice to move from talking about support to actually providing it.”

“We’re not asking for bailouts”, he said, “just regular and earlier payment of money that would eventually be due.

“The current model of only being paid once a case is finished is not sustainable with the systemic delays that covid-19 has severely exacerbated.”