Government saves three times what it spends on early legal advice, finds new report
Bar Council and Access to Justice Foundation urge government to provide more support for free legal advice
Providing free specialist legal advice could save the government £4.5billion for every half a million people who receive it, a new report has found, as leading legal organisations renew calls to “spend to save on justice”.
The new report ‘The value of justice for all’ commissioned by the Access to Justice Foundation in partnership with the Bar Council, evaluates the economic value of the free legal advice sector.
Researchers found that free legal advice and support at an average cost of £3,300 per case saved the government £9,100 in 2023 – meaning that for every £1 the Treasury spent on legal advice, it saved the public purse £2.71 – a nearly threefold saving on investment.
The report sets out that the bulk of savings to the public sector are realised in the first year, and that significant savings continue to be made over time.
Free early legal advice covers a wide range of areas including debt, health and social care, benefits and welfare, housing, immigration, employment rights, and domestic abuse.
Investment is urgently needed as the report found the free legal advice sector is now at “breaking point” with the UK facing a “perfect storm of challenges”. The repercussions of the pandemic and the ongoing cost-of-living crisis mean that more and more individuals will face personal and financial crises, with researchers finding that the average person seeking free legal advice is dealing with five different legal problems at one time.
In order to put this report together, researchers from Pragmatix Advisory Limited interviewed more than 20 free specialist legal advice providers and gathered data from 54 organisations that assisted more than 129,000 people last year.
Legal advice providers said there had been a shift in the economic status of those accessing their services with a notable increase in people who previously would have paid for legal services now needing free legal advice – 37% of people using free legal advice were employed or self-employed and 12% were homeowners. It is predicted that demand will continue to grow.
Receiving free legal advice can have a positive domino effect on other areas of society: many people accessing free specialist legal advice benefit from higher employment rates, improved health and wellbeing, and reduced reliance on benefits. It is thought by the authors that getting legal advice to 100,000 people could lead to 38,900 more people entering the workforce, generating approximately £81million in income tax and National Insurance.
Bar Council Chair, Sam Townend KC, said: “Investing in free legal advice will help to resolve problems earlier and mean fewer cases need to reach court. This will bear down on the record high court case backlog and will aid the wider justice system which is under huge strain and increasing pressure. The new Government should adopt a fresh approach to legal aid and recognise this is an area where it can spend to save. The report makes plain how a properly funded free legal advice sector would make a huge difference to the hundreds of thousands of people behind each case, those working in the system and the public purse in just one year alone.”
Clare Carter, the Chief Executive of the Access to Justice Foundation, said: “As economic challenges persist and the demand for free legal advice grows, the role of free legal advice has never been more critical. This report emphasises the challenges that multiple and intersecting legal issues present marginalised communities, and the role of advice providers in supporting the early resolution of legal issues in a cost-effective way. Without increased and sustained investment, we risk failing the people, places, and communities who need us most. This report demonstrates that funding free legal advice is both an ethical obligation and a wise financial decision."
Key statistics
- Demographic of free legal advice clients in 2023:
- 51% of people seeking advice have a long-standing illness or disability.
- 12% were homeowners.
- 70% were private or social renters.
- 37% were employed or self-employed.
- 32,000 debt relief orders were issued in 2023, an increase from 20,000 in 2021.
- Individuals and families accessing specialist advice services frequently present with multiple legal problems, with an average of 4.86 issues per person seeking advice.
- In 2022/23, Civil Legal Aid provision was £728 million lower in real terms than it was a decade ago. Respondents reported just 8% of their funding for free legal advice provision came from Legal Aid.
- The funding gap in the free legal advice sector is a major concern for all providers surveyed. One advice provider estimated that their organisation had a deficit of between £120,000 and £250,000.
- The research calculated a range of savings scenarios recognising that not everyone in receipt of free legal advice has a successful outcome in their case:
- Optimistic: savings of up to £9,700 per case or ~£4.9bn for every 500k people
- Central: savings of £9,100 per case or ~£4.5bn for every 500k people
- Conservative: savings of ~£3,000 per case or £1.5bn for every 500k people
- Free legal advice has positive knock-on effects too:
- For each person who receives advice, 0.39 additional household members become employable.
- Advising 100,000 clients could lead to 38,900 more people entering the workforce, generating approximately £81 million in income tax and National Insurance contributions.
- People with access to free specialist legal advice are projected to spend 1.6 fewer years in crisis compared to those without access.
Read the full report here.
