Allen & Overy (A&O) has called on its fellow City firms to join a new scheme in which the interest on client accounts is donated to prop up the increasingly thin civil legal aid budget via the London Legal Support Trust. “We expect this new avenue for raising funds to generate donations from Allen & Overy in excess of £200,000 over the next three years,” comments senior partner Guy Beringer. “We hope that this simple voluntary model will be considered by other firms with more than 20 partners.”
A&O says the move is in response to a recent letter from the South West London Law Centre to the Prime Minister, which urges the Government to boost civil legal aid funding. That letter reflected concerns expressed recently by the newly-formed Access to Justice Alliance that the civil legal aid system was facing a crisis. The alliance was formed to bring attention to the increasing problems of legal aid deserts springing up throughout the country. According to the group, the number of high street firms taking on work has decreased by 14 per cent in the last two years and, as a result, the number of people who have been helped has decreased by 28 per cent.
The A&O model is similar to that proposed by the leading human rights solicitor Geoffrey Bindman. He has long called for the establishment of a fund or foundation to support access to justice, to be financed by a levy on the profits of the wealthy City firms through interest on client accounts. A legal aid foundation with really substantial resources, which the profession could well afford, would “enormously enhance its reputation”, Bindman has argued. According to the solicitor, “the weakness of pro bono, which is not to deny the virtue of those who do it”, is its detachment from the mainstream of public provision. What is needed, he says, is “the practical participation of the whole profession in the funding of legal aid”.
When firms place client monies on deposit they generate a return. The interest accruing exceeds the interest payable in respect of each tranche of client monies. Under the Solicitors’ Accounts Rules, that excess is properly retained by the firms. It is that sum that A&O is donating. When the model has been floated in the past, the City firms had kicked it into touch. There were concerns that, if the City raised money in this way, it would let the Government off the hook and it would reduce its contribution accordingly. Beringer stresses that this is not a way of enabling the Government to reduce its obligation to provide a publicly funded legal aid system. “It is instead a platform from which to ask the Government to meet that obligation and match this increase in funding,” he says.
Steve Hynes, director of the Law Centres Federation, says his organisation “wholeheartedly supports” the A&O initiative. “Law Centres throughout the country are desperately short of funds to meet the need for social welfare legal advice,” he says. “We’ve certainly appreciated the increasing help from City firms to Law Centres over the past few years, and we’d urge all of the larger commercial firms in London to join the scheme.”