More affordable justice: Proposals to reform the legal aid means tests and implications for living standards

This report comments on proposed changes in the Legal Aid Means Test Review, published in March 2022 for consultation by the Ministry of Justice (MoJ, 2022). This first review of the means test in 13 years proposes a wide range of changes in different parts of the legal aid system, and is consulting on 109 questions. This report does not seek to answer all of these questions, but rather to comment on the extent to which key aspects of the new system improve access to justice, by helping people with legal costs which they could not otherwise reasonably be expected to afford, given their income and other financial resources. It follows up on the findings of two earlier reports (Hirsch, 2018a and Hirsch,2018b), which showed that the civil and the criminal legal aid systems respectively are denying help with legal costs to people who objectively could not be expected to cover these costs themselves.

Overall, the MoJ proposals create a substantially more generous legal aid system than the present one. Both increases in the income thresholds determining eligibility and efforts to structure the means tests more fairly would improve the ability of people to afford legal costs, at the point where they are required either to contribute to these costs or to cover them entirely. The proposed changes by no means eliminate cases where paying for legal services would leave people short of being able to afford a minimum living standard, but where this remains the case, the magnitude of that shortfall is greatly reduced.

However, the report also comments on several aspects of the proposals that could be improved. Most importantly, it shows that the progress made by these changes risks being very seriously undermined without more frequent and systematic inflation uprating than proposed – particularly in the present period of high inflation. It also points to some structural aspects of the proposals that could be reformed to help achieve the MoJ’s objective of making them more equitable. In particular, lone parents are substantially disadvantaged by the proposed structure, and this could especially undermine their ability to achieve justice in the civil system, with troubling consequences for family cases where they rely on the courts for protection. A simple adjustment in the structures proposed could remedy this inequity.

The report makes two main recommendations:

1) That all the thresholds and allowances used in the legal aid means test be updated annually in line the Consumer Prices Index (CPI) – and with the CPIH variant including housing for gross income thresholds. Such upratings should be backdated to take account of inflation since the collection of data on expenditure and income on which thresholds are based.

2) That lone parents be given a supplementary cost of living allowance equal to half the amount that would be assigned to a partner or additional adult.

A further, subsidiary recommendation is that Housing Benefit income, and the housing element of Universal Credit, should not be included when applying the gross income limit, because doing so would exclude some civil applicants in high-rent areas with low disposable income.