CICs not ABSs the way forward for law centres, Hynes says

Steve Hynes, director of the Legal Action Group, has said that community interest companies (CICs) rather than ABSs are likely to be the way forward for law centres wanting to generate income by charging clients.

Islington Law Centre announced earlier this week that it had applied for an ABS licence for its CIC and hopes to get SRA approval before the legal aid cuts come into force next April.

“ABSs don’t really come into it,” Hynes said. “It’s all a bit of a red herring as far as law centres are concerned.

“They have always been MDPs, and offered a mixture of regulated services controlled by solicitors and advice on debt and other community services which are not regulated by the Law Society.

“Law centres cannot charge and that’s why they might need to set up a CIC.”

Hynes, whose book Austerity Justice is published by LAG next month, said Rochdale law centre led the way by setting up a CIC earlier this year to provide fixed fee services for immigration and employment.

He said other law centres might follow and introduce charging services to create an income stream to help them stay open.

He said Austerity Justice highlighted the way the government was “backsliding” on concessions it made during the passage of the legal aid bill through parliament.

“I make it clear in the book that there were strong disagreements in the coalition and Liberals have signalled that they would like to reverse some of what LASPO is doing,” Hynes said.

He said Lib Dems “bought the argument” that legal aid cuts were essential to deficit reduction but disquiet among MPs was likely to grow, particularly as the MoJ had backtracked on a concession over complex welfare benefit cases.

Hynes said Lid Dem rebels, who voted against the government on the issue in the Commons and the Lords, believed that legal aid would be retained for advice in these cases from the start.

Instead he said justice minister Jeremy Wright told the Commons in September that legal aid would only be available where the first tier tribunal had itself identified an error on a point of law in one of its previous decisions.

“There should be a Minister for Access to Justice,” Hynes added. “Ken Clarke and Jonathan Djanogly did not see the government as having a responsibility.

“Any future government needs to reassert the MoJ’s central role in ensuring access to justice.”