Higher civil legal aid fees proposed by the government to keep the sector sustainable will be swallowed up by the forthcoming increase in employers’ national insurance contributions, the Law Society has warned.
The Ministry of Justice has consulted on increasing fees for immigration and housing work to a minimum rate in the region of £65/£69 per hour (non-London/London), or a 10% uplift, whichever is higher.
In its consultation submission, the Society says the proposed rates are not enough given that solicitors have had no pay rise in 30 years. Providers are also worried the rates will be ‘swallowed up’ by the higher tax bill when employers’ NICs rise by 1.2 percentage points to 15% on 6 April.
Law firm Duncan Lewis, which dropped legal action against the government after the lord chancellor promised a consultation, reveals in its submission the extent to which immigration and asylum work is loss-making.
Between April 2020 and March 2023, Duncan Lewis recovered for controlled immigration work an average of £46.05 per fee-earner hour – a loss of £8.28 per hour. Some 15% of the total number of hours spent on controlled work during this period was unpaid.
The MoJ’s consultation is limited to housing and immigration. A decision on the other nine contract categories of law, such as community care, mental health and discrimination, will be made after the June spending review.
