A legal thinktank calls on the government to adopt a more balanced approach to legal reform in a paper published today, and suggests that the large number of legal aid firms does not achieve best value for money.

The Legal Services Institute (LSI) said the legal aid system faces a ‘vicious circle’ in which: some people do not receive legal representation when the expectations of a ‘decent society’ suggest they should; some lawyers do not receive a reasonable rate of remuneration; and the public purse will not stretch to allow greater eligibility or greater pay.

It said the government needs to balance the increasing number of legal rights afforded to citizens with the availability of funds to allow them to pursue those rights.

On legal aid, the LSI argued that the large number of suppliers gives rise to greater overhead costs for the Legal Services Commission and for law firms, suggesting best value for money is not being achieved.

It added that the fragmentation of the supplier base, combined with the competition engendered by the legal aid procurement process, does not encourage cooperation or innovation by firms.

The report questioned whether the current legal aid schemes provide a quality service for those who use them.

It suggested that ‘too often’ clients are getting something ‘which is not sufficiently useful’ because lawyers are ‘sitting on the fence or are fanning the flames of a dispute rather than working quickly to resolve it’.

LSI director Stephen Mayson (pictured) said: ‘Although it is entirely reasonable that government and taxpayers should continue to expect greater efficiencies and value for money in the delivery of legal aid, this must be subject to the further imperative that the supply of funding should not be considered in isolation.

‘If efficiency savings in legal aid lead to any undermining of the rule of law, or compromise the administration of or access to justice, while we might have achieved a degree of fiscal prudence, society will undoubtedly be the poorer for it,’ he added.

An MoJ spokesman said: ‘We must consider how to make a more efficient legal aid system which is focused on those who most need it within the necessary financial constraints.

‘We have announced the start of a fundamental look at the legal aid system. This policy assessment gives us the opportunity to take a fresh look across the whole system, to innovate and provide a value-for-money scheme built on sound foundations. We will be seeking views on proposals in the autumn.

‘There has been a series of major reviews over the last few years. It is now time for action to return long-term stability to the legal aid system and protect the vulnerable users of our justice system.’

The LSI is funded by The College of Law as part of its charitable foundation.