Escalating costs eat into scheme

Only half of homes in the UK receive legal aid, writes Stephen Ward

Legal aid was set up in 1949, by the same Labour Government which introduced the National Health Service and other foundations of the welfare state, to fund anyone with a reasonable case. Only the richest 20 per cent were excluded.

Until the early 1960s, around 80 per cent of the population remained eligible, then means tests were tightened until 1979 when the limits were raised to almost 1949 levels.

Since 1979, faced with an apparently uncontrollable growth in the use of legal aid the Government has found the only way to put a brake on spending is to tighten the tests.

The result, regretted by the Lord Chancellor in his speech, has been that the founding principle of legal aid, universal access to justice to those in need, has been eroded from middle income families. The proportion of households eligible has fallen nowto less than half.

The sums involved are vast. Legal aid cost the country £685 million in 1990-91, and in the current financial year the cost will exceed £1,300m.

Expenditure has risen fivefold in real terms since 1979-80, while total Government spending has risen by only 29 per cent.

At the same time more and more people have been claiming legal aid. In a decade, civil legal aid cases have increased by three quarters to 388,000, and criminal legal aid by nearly a third to 600,000. The means testing is complicated, and slightly different for criminal and civil cases. For civil cases, people qualify for complete funding if they have less than £6,750 disposable capital (£8,560 in personal injury cases) and a disposable income of less than £2,382. With an income up to £7,060 (£7,780 forpersonal injury cases) they receive a proportion of their costs.

With criminal legal aid the defendants have to contribute to costs if their disposable income exceeds £46 a week. In both civil and legal cases, the aid almost always continues as long as the case lasts, and pays whatever the lawyers charge.

Last month the Lord Chancellor published a Green Paper outlining proposals to close loopholes, which have seen a series of apparently wealthy people receiving legal aid.

The deductions allowed to calculate "disposable" income include mortgage payments and debts, and while spouses' wealth and income is considered, that of other relatives is not.

In the case which triggered the Green Paper, Dr Jawad Hashim, 57, an Iraqi with Canadian citizenship, who reputedly owns several homes, received more than £4m from the legal aid fund.