A couple of weeks ago, I shared a platform with various legal luminaries to answer questions from an audience of legal advice providers. Understandably, since many of their organisations were funded, directly or indirectly, by legal aid, most of the questions invited us to decry the changes in legal aid as a consequence of the credit-driven crisis created by the banks, and to mutter dire predictions that they will leave poorer people in this country without any effective access to law. And given that many of my questioners knew that my previous job had been running Shelter – the country's leading provider of housing law and a campaigner against credit culture – it would have been easy for me to play to the gallery.
No one can deny that what is happening to legal aid will affect the ability of some of our poorest citizens to access the service of a lawyer. The audience was vehement on what the changes will mean to their ability to offer basic advice on asylum, housing and crime, and the Hlcarpenter.com has reported that legal aid for cases involving issues such as clinical negligence looks set to be ended. These are real issues.
But what the audience did not necessarily account for, I think, is the possibility that the inevitable growth of unmet legal need provides a business opportunity for the increasing number of commercial operators entering the legal profession.
Not only are some law firms beginning to ape their peers in other sectors by offering low-cost, commoditised legal products, but we are also seeing the intrusion into legal services of banks and other financial institutions looking to find ways of profiting from what is a rapidly changing market.
This is not necessarily a bad thing. Protected by their high social standing and centuries-old traditions, legal professionals have been relatively slow to understand and adapt to the needs of their consumers. Costs have remained stubbornly high and the way those costs are often expressed – hourly charging, hidden extras, obscure language and little or no pricing certainty – have not exactly been customer-friendly. Anything which makes law more affordable and accessible has to be welcomed.
But, as with the reforms in the retail banking sector of the past two or three decades, it would do to approach the changes with some level of caution. Do these new methods of purchasing them really represent value for money? And, even if they do, how far should we really be encouraging people to spend their hard-earned cash on paying for law?
These are not just theoretical questions. Writing our latest annual report, I looked at some causes of complaints about lawyers that we've investigated in the last year. Something that jumped out at me was the increasing number of complaints about cases funded by these new models: conditional 'no win, no fee' and fixed fee agreements and, perhaps most intriguingly, legal expenses insurance. In far too many of these, it was clear that the consumer was being enticed into legal action by apparently helpful funding mechanisms, which simply didn't work for them.
Take legal insurance, a subject on which we have recently commissioned research. Roughly 40% of us have some sort of legal expenses insurance, usually bundled in with home contents or car cover. Because of this bundling, it appears, we often forget we ever bought it, so the rate of claim is low; for most of us, therefore, our money is wasted. More worryingly, as my caseload shows, even when we do try to claim, we are ignorant of what the product covers – 89% of us have no idea what is excluded from cover – and for some claimants, the attempt to invoke it has left them high and dry.
The same goes for conditional and fixed-fee arrangements. All the evidence we see indicates that many of those who are enticed into law by these sorts of funding mechanisms don't really understand what they are buying. Many are left dissatisfied and, in some sad cases, are left with substantial bills as their cases collapse and they find themselves responsible for the other side's bills.
It is worth repeating that I am not criticising here the attempt to make law more affordable, nor to find new ways of enabling people who might previously have accessed legal aid to pay for the vital legal work necessary to protect themselves and their families. But while most lawyers are still motivated by a sense of vocation rather than greed, the increasing commercialisation of law means that we can no longer take that for granted. These new funding mechanisms are, I suspect, the manifestations of a wider revolution in how we access law, and the arrival of banks and high street chains on legal shores brings with it the potential for further innovations in legal funding. It would be ironic - but not altogether surprising - if we found ourselves taking out loans and overdrafts offered to specifically cover legal costs. Only time will tell, but the credit bandwagon looks set to roll on.