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Nicola Laver

Editor, Solicitors Journal

'Serious risk' of widescale market collapse of criminal firms

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'Serious risk' of widescale market collapse of criminal firms

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Government must urgently address firms’ cashflow problems as the first wave of criminal law firm closures hits, warns the Law Society

Government must urgently address firms’ cashflow problems as the first wave of criminal law firm closures hits the profession, the Law Society said. 

The crisis could precipitate the collapse of criminal legal aid as we know it, warned the Society.

So far, 120 firms have collapsed because of the covid-19 crisis and more are expected.

Before the pandemic, there were already 124 fewer criminal legal aid firms than last year. 

The Society has demanded that the Ministry of Justice (MoJ) urgently address firms’ cashflow issues by adjusting how the Legal Aid Agency pays for work; immediately reversing the previous cut of 8.75% for criminal legal aid; and giving business rate relief for firms.

It also called for improvements to "the broader package of accelerated measures and bring to the fore the focus on sustainability”.

The demands were included in the Society’s supplemental response to the government consultation on interim proposals of the criminal legal aid review. 

It had already proposed across the board rates increase, a higher fee for sent cases and alignment of the principle of paying 100% for cracked trials.

Many practitioners, said the Society, hoped the accelerated items would provide urgent relief from the pre-existing deepening crisis in the criminal legal aid profession; however, even before the pandemic they were insufficient.

Law Society president Simon Davis said work for criminal law firms has “fallen through the floor – leaving many hanging on for survival” with many more duty solicitor schemes facing imminent collapse without urgent intervention.

“We have made clear since the start of the pandemic that criminal legal aid firms are facing a triple whammy: immediate cashflow problems, short to medium term permanent loss of income, and the pre-existing crisis of sustainability.

“Unless the government addresses all three, there is a serious risk of widescale market collapse,” added Davis.

Bill Waddington, chair of the Criminal Law Solicitors’ Association, said: “When the collapse comes, the government will need to invest millions to rebuild the system and it needs to invest now to avoid the inevitable collapse.”

He said criminal lawyers have been warning the government for years of the pending crisis but has “done precisely nothing and appears happy to sit back and watch the collapse”.

“There has been little or no help provided to the profession during the crisis notwithstanding the fact we are essential workers.

“The legal aid review is stuck in concrete and the misleadingly named ‘accelerated items’ are no further forward than they were 12 months ago”, he said. 

Davis warned that the growing number of areas in the country without any defence solicitors is putting “the very notion of British justice in jeopardy”.