What should Lawyers Earn?

This year has seen a debate developing over the fraught question of what lawyers should earn. ‘Rich lawyers’ are the butt of many jokes (“I received a bill from my lawyer. It contained a breakdown of costs. It contained the following items: ‘crossing over the road to say hello to you; crossing back when I realised it was not you’.”) The popular perception is that fees are way too high. However, it is perhaps more interesting and instructive to focus on one area where some really important debates have developed: the amount of money that lawyers are earning from legal aid. The present government has been keen to show that earnings from legal aid are excessive and should be curbed. How accurate are the government’s claims about legal aid earnings?

The Law Society published figures that showed that a legal aid lawyer’s average salary was around £25,000 in 2009: “less than a prison officer or a sewage plant worker. This contrasts Commercial1sharply with the mythical legal aid ‘fat cats’ often described in the press.” (http://www.liberty-human-rights.org.uk/human-rights/justice/legal-aid/index.php). Defenders of legal aid also point out that advice and advocacy can be complex and demanding work and should be remunerated accordingly. Whilst this argument is compelling, it might be necessary to convince a sceptical public.

The debate about legal does not just focus on what legal aid lawyers earn. The government’s case for cuts is based on the claim that the legal aid system is “one of the most expensive in the world”- and one in which costs continue to rise: “ [b]etween 2000 and 2010 expenditure on legal aid rose by almost 3 in real terms. (House of Commons Justice Committee, Third Report of Session 2010–11). To assess these claims, we also need to get some sense of the present legal aid budget. The MoJ’s figures on legal aid tell us that of the £8.6 billion of departmental spending – legal aid funding amounts to 1.9 billion (compared with the £1.2 billion cost involved in running courts and tribunals, and £3.5 billion on prisons and probation (MoJ Annual Report 12-13, p 93).

How does this compare with other aspects of government expenditure? To give some very rough comparisons, figures for 2013 show that government spending on health care amounted to over £124 billion and spending on funding pensions was a little over £139 billion. The legal aid budget is thus relatively small in comparison.

We must now weigh up the claim that the legal aid system is one of the most expensive in the world. Comparative information about the cost of legal aid systems in other countries is necessary. One useful source of information comes from the European Commission for the Efficiency of Justice (CEPEJ). The House of Commons Justice Committee referred to a recent CEPEJ report when considering legal aid: “Council of Europe data on judicial systems across Europe illustrate that when the costs of courts, public prosecution services and legal aid are combined, the budget in England and Wales as a percentage of the GDP per capita is equal to the average” (page 16). The Justice Committee also referred to an earlier report- commissioned by the former Labour government- (R Bowles and A Perry, International comparison of publicly funded legal services and justice systems). Bowles and Perry point out that one of the reasons for the greater expenditure on legal aid in England and Wales was: “the higher levels of crime and the greater number of criminal prosecutions brought to court.” Bowles and Perry also “found that the relatively higher cost of legal aid in England and Wales compared to other EU countries appears ‘to be offset by lower court budgets and public prosecution costs.’ (http://www.publications.parliament.uk/pa/cm201011/cmselect/cmjust/681/681i.pdf)

What do we make of these arguments?

It would appear – at least on the balance of evidence presented here- that the legal aid system in the UK is not one of the most expensive in the world. Even if we accept that some cuts are necessary, could savings be found elsewhere? The House of Commons Justice Committee argued that there were other ways of ‘reducing costs’: “including creating a financial incentive for public bodies such as the Department for Work and Pensions to get their decisions right first time, and so avoid expensive court and tribunal cases.” (House of Commons Justice Committee, Third Report of Session 2010–11, p.11).

Does this severely compromise the government’s case for further cuts? The arguments are not just about figures; they are about principles:

Supporters of the cuts would argue…. that the current system [encourages] too many people… to go to court over all manner of complaints at the taxpayers’ expense. In an increasingly rights-based culture, moral hazard has corrupted the system, because with no risk of personal cost, too many of us figure we might as well give court a go.” (http://www.theguardian.com/law/2013/nov/01/michael-mansfield-qc-interview)

A provocative claim! In order to assess it, we would need figures on levels of litigation. We would also have to be able to isolate legal aid as the main causational factor in bringing about litigation. Against this position one could also argue that levels of litigation are driven by other factors. People may look to the courts for redress because other ways of resolving problems (and the social and economic conditions which give rise to them) have failed. If we accept that litigation has increased, to what extent could we see it as a symptom of wider problems in welfare and public services caused (or at least exacerbated) by austerity policies?

One problem might be that the lawyers have not made their case to the public in an effective manner. Jonathan Jones, writing in the Guardian, pointed out that in a photograph of ‘the strike’, one protesting barrister was holding a £1,100 handbag:

“There seems every reason to fear that people will be denied justice as a result of the government’s cuts to legal aid. There is also a perfectly rational case why top barristers should make good money – yet while this government respects the moneymaking rights of bankers whose talents are distinctly questionable, it is happy to steal the left’s “fatcat” rhetoric to undermine public servants of any kind…. Presumably the real problem is that if you stop public work from paying, the most in-demand (ie best) lawyers will specialise in profitable commercial fields instead. Why not just make this clear? Unfortunately all public debate in modern Britain is hamstrung by point scoring doublespeak.” http://www.theguardian.com/commentisfree/2014/jan/07/protesting-barristers-case-streets-satire-legal-aid

Jones’ points are well made. The justification of austerity policies, at least as ‘spun’ by the government, attempts to blame ‘the poor’ and public servants like legal aid lawyers for driving up the costs of welfare and public spending. Jones is suggesting that this is a distraction from the real reason why austerity policies were needed in the first place: the failure to regulate the banks and financial markets. However, the point is not so much that good lawyers will abandon legal aid- rather- the cuts (to return to an earlier argument) are ‘across the board’. Not only to they make it more difficult for legal aid lawyers to provide an effective service for their clients, cutting legal aid causes other costs to rise.

This blog was written by Professor Adam Gearey, Law Lecturer at Birkbeck, University of London.

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