Legal Aid Scheme: Companies

Ministry of Justice written question – answered on 15th September 2020.

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Photo of Karl Turner Karl Turner Shadow Minister (Justice)

To ask the Secretary of State for Justice, what assessment he has made of the effect of the reduction of standard monthly payments to criminal legal aid firms on those firms.

Photo of Alex Chalk Alex Chalk Assistant Whip, The Parliamentary Under-Secretary of State for Justice

At present, 17% of all crime accounts are paid under the Standard Monthly Payment (‘SMP’) model. The remainder have opted for Variable Monthly Payments, which pays the actual value of the claim submitted each month. Firms can elect to be paid by either model, according to which may be most advantageous to them. SMPs relate to Controlled Work services only, and therefore reflect a proportion of a provider’s total revenue.

The number of those accounts paid via SMP which have seen a reduction in payments since July 2020 represents 6% of all crime accounts. Where a reduction is necessary, this takes effect following the Legal Aid Agency notifying providers of this in advance. Firms facing financial hardship can discuss payment options further with their LAA Contract Manager.

The LAA has implemented several changes to maintain cashflow to firms and to allow firms to be paid more quickly – through these changes we can inject up to £51 million per year into criminal legal aid. We have begun a review into how criminal lawyers are compensated for their work: https://consult.justice.gov.uk/criminal-legal-aid/criminal-legal-aid-review/.

In addition to the support schemes offered by the government, we have continued to pay providers on time and introduced a number of measures to speed up payments to providers. All of the measures taken by the LAA are set out on our gov.uk page: https://www.gov.uk/guidance/coronavirus-covid-19-legal-aid-agency-contingency-response#financial-relief-page.

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