Legal aid is a vital part of our justice system but we must ensure it is sustainable for those who need it, for those who provide legal services as part of it and for the taxpayer, who ultimately pays for it.
When the Government began the process of reform, we had one of the most expensive legal aid systems in the world. Even after the implementation of all the reforms, England and Wales will still have one of the most generous legal aid systems in the world – spending around £1.5 billion each year.
Separately, I am aware that the Government made a priority of addressing the high costs of civil litigation in England and Wales, which is why Part 2 of the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2012 reformed the operation of no win no fee conditional fee agreements. You will be aware that those reforms came into effect generally in April 2013, however, it is my understanding that the Government agreed that more time was needed in respect of insolvency proceedings, therefore commencement of sections 44 and 46 of the LASPO Act 2012 will be delayed for insolvency proceedings for the time being. Accordingly, no win no fee agreements in these proceedings will continue to operate on a pre-LASPO Act basis with any conditional fee agreement success fees and after the event insurance premiums remaining recoverable from the losing party.
The Ministry of Justice is in the process of considering the way forward in relation to the application to insolvency litigation of the no win no fee reforms in Part 2 of the Act.