In depth: Could new funding models for early advice transform civil justice?

Ask any frontline advice sector practitioner to explain how early legal support can stop a person’s housing, employment or debt problem from spiralling and they will give you an example of someone they helped that week.

A recent Ministry of Justice policy paper revealed that one recipient organisation of a nine-month government grant to provide legal support helped a distressed 73-year-old tenant served with an invalid no-fault eviction notice avoid homelessness. In another case, the grant recipient helped a person with schizophrenia struggling to challenge a welfare benefits decision to receive £4,830 in backdated payments.

Yet that policy paper also exposed the struggles faced by the advice sector. Demand for help has surged and cases have become increasingly complex. But organisations are struggling to recruit and retain talent – and more are competing for a limited number of grants.

‘The uncertainty surrounding grant funding has made it difficult to establish the kind of secure foundation we truly need for our growth and service improvement,’ one grant recipient said.

A £6m ‘boost’ announced by the MoJ last month to extend the Improving Outcomes Through Legal Support grant by 12 months is welcome, but the advice sector needs a more stable funding model.

With that in mind, the University of Oxford’s Centre for Socio-Legal Studies has announced a two-year research project to explore ‘mixed’ funding models to support organisations providing free and early legal advice.

Funded by the Nuffield Foundation, the project is led by Professor Linda Mulcahy of the University of Oxford, along with Professor Neil Rickman of the University of Surrey and Clare Carter, chief executive of the Access to Justice Foundation.

The project will explore funding models, such as using interest on lawyer trust accounts, which have operated successfully in other countries, and assess their UK potential. It will also explore models that do not exist or remain underdeveloped in a domestic context, such as levies on large commercial law firms, legal expenses insurance, residual funds from collective action cases and the redirection of dormant client monies.

According to the American Bar Association, interest on lawyer trust accounts has generated more than $4bn in revenue in the US since 1981 and comprises a significant source of funding for programmes that provide civil legal services to Americans living in poverty.

A levy on law firms has been floated several times here. Michael Gove raised the prospect as lord chancellor, telling the Commons in 2015 that the government was going to ask the ‘very richest in the justice system to do a little bit more’ to fund the justice system. Another Conservative justice secretary, Alex Chalk, revealed that he considered the possibility of a City levy to fund legal aid shortly after being appointed a justice minister in 2020.

Speaking to the Gazette, Carter and Mulcahy said they do not have a preference for any particular scheme. The purpose of the project is to explore different funding models and build an evidence base ‘to move the conversation forward to an informed place’.

The project will have four key stages: interviews with providers of free advice to assess priorities, and efficient and effective systems for fund distribution; a comprehensive review of overseas schemes; evaluation; and six in-depth case studies. Each stage will be informed by stakeholder engagement. Members of the stakeholder group include the Law Society, Solicitors Regulation Authority, Legal Services Board and MoJ.

The first stage will see organisations such as Citizens Advice and Law Centres Network interviewed about what sort of funding works for their members and their priorities. ‘We need to find out what they want, what sort of money works for them, what sort of money comes with conditions that make it cumbersome and limits their activities, and what is the problem they need to help solve,’ Mulcahy said.

The project will result in an open-access database, policy briefings, an accessible project report with practical recommendations and widespread dissemination of the findings.

‘If we move the conversation forward to articulate what might work and what might not work, we will be in a better position to have a policy discussion than where we are at the moment,’ Carter said.