Rich face legal aid clampdown
Wednesday 21 February 1996
A promised crackdown on abuses of the legal aid system by apparently wealthy people is expected to be unveiled by the Lord Chancellor, Lord Mackay of Clashfern, next week.
The measures aimed at limiting help for those with lavish lifestyles will come in regulations to be laid before both Houses of Parliament for implementation in June.
A new special investigations unit run by the Legal Aid Board would have the power to scrutinise the assets of both relatives and friends and take into account any equity in a home of more than pounds 100,000 when an applicant's assets are being assessed.
The new rules, to cover both criminal and civil cases, come after an outcry over the legal aid bills run up by Ernest Saunders, Asil Nadir, Jawad Hashim, a former aide to Saddam Hussein, and the Maxwell brothers.
There will also be a crackdown on people who are claiming aid because they have large mortgages to pay, with a cap on the amount of mortgage repayments that can be set against income.
Under the new rules people could be forced to sell their homes to pay their legal bills.
The investigations unit will also carefully scrutinise attempts by claimants to give their money away in order to qualify for aid. Officials will be allowed to look at the assets of children as well as other relatives and friends where these appear to provide a significant material advantage to the applicant.
Civil cases account for about two-thirds of the pounds 1.6bn legal aid budget. Jawad Hashim received nearly pounds 3m in legal aid, despite reports that he had six houses. The case ended with him being ordered to pay the Arab Monetary Fund, more than pounds 30m in damages.
Most high profile cases, however, have involved criminal proceedings. The Maxwell brothers' trial has cost the public nearly pounds 20m so far. Some pounds 8.3m has been paid for magistrates' court hearings and interim costs.
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