Ministry of Justice (MoJ) proposed recently to cut legal aid fees by a further 10% for legal firms and charities. This decision may affect all target industries and a number of them may enter insolvency.

Already two large charity funded immigration services “Immigration Advisory Servic’s” and “Refugee and Migrant Justice” have announced their financial problems, that maywell lead to insolvency.

The charity was trying to negotiate repayment of money owed to the Legal Services Commission (LSC), but IAS’s trustees took the view that as a consequence of the pending legal aid cuts, the service would not have sufficient cash in the future to pay off this debt.

This case is following the news that the legal advice charity Law for All, based in west London, entered liquidation because of the looming reduction in fees.

The charity issued a statement that said: “Changes to the administration of publicly funded legal work have resulted in an unsustainable administrative burden… not to mention reduced payments in real terms”.

As well as reducing legal aid fees, the government’s Legal Aid, Sentencing and Punishment of Offenders Bill proposes to save a further £350M by withdrawing legal aid from welfare, medical negligence, housing and family issues.

The extra 10% cut will come into force in October for criminal and civil cases and next February for family cases, unless it is voted down by MPs.

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