The full impact of the COVID-19 court closures on the Scottish legal profession has been revealed in the 2020-21 annual report and accounts of the Scottish Legal Aid Board.

They show an overall reduction of £31.8m in the cost of providing legal aid in the year to 31 March 2021, a year that began as the first court closures due to the pandemic took hold. The total fell from £130.9m in 2019-20 to £99.1m in 2020-21, an unprecedented fall, with gross payments to legal firms down by 24%.

The Board states that in some areas, the reduction in spend reflects a fall in the need for advice, but acknowledges that much of the reduction "flows from the challenges in progressing cases through the courts. This has had a clear knock-on effect in the ability of solicitors to conclude cases and submit their accounts for payment". Despite some takeup of enhanced interim payment arrangements, these shifts in timescales "have clearly had a major impact on cash flow and placed pressure on the affected businesses".

As well as delays to cases progressing, there was an overall 20% reduction the number of new cases. The number of firms receiving a legal aid payment during the year dropped by 7% from 733 to 679.

The biggest impact was in criminal legal assistance, where spending fell by 31% to £52m compared to £75.9m the previous year. All types of criminal payments were down, but the drop was particularly significant in solemn work, which fell by 41% from £33.1m to £19.6m, despite a substantial underlying increase in the number of new solemn cases. However summary payments also fell by almost a third, from £24m to £16.1m. Criminal advice and assistance and ABWOR spending was down from £13.14m to £11.46m. PDSO costs rose from £2.28m to £2.33m.

Civil legal assistance expenditure fell 11% to £40.3m, down by £5.9m compared to the previous year, with a 7% fall in new family cases and a 31% fall in non-family cases. The suspension of evictions had a particular impact on demand for help with housing issues, while a six month deferral of guardianship renewal had a similar effect.

The cost of children’s legal assistance fell to £3.8m compared to £5.3m the previous year.

SLAB administration costs rose from £12.44m to £12.92m.

The Board notes that the reductions in spending "are not savings that SLAB makes or holds. All funding is managed by Scottish Government and the budget is held by them and redistributed according to spending decisions made by ministers". 

Chief executive Colin Lancaster commented: "In a year that has been bleak in many ways there have been many positive examples of first-class service in the delivery of legal aid.

"Most importantly, the legal profession, including SLAB’s own solicitors, have continued to deliver frontline services throughout periods of heightened public health restrictions, ensuring that the justice system has continued to operate and those in need have had the chance of receiving the help the legal aid system is there to support."

He predicted that delays to work, or to billing for work, would result in a timing issue that will see an increase in payments in the coming years.

Mr Lancaster said the closure of courts for all but essential business during the early months of the lockdown had contributed to a significant backlog of cases, particularly in criminal cases. The Scottish Government allocated £9m in direct funding to legal aid solicitors in acknowledgement of the pressures faced by the legal profession. A further £1m was allocated to support firms in hiring new trainees for legal aid work. “We have also been committed to working with the Scottish Government and the legal profession in developing measures to support the legal profession with their cash flow as new business levels fell and it became harder to progress cases to conclusion. “This report gives more details on that work.

He added: "We look forward to working with the Scottish Government and the legal profession on further legal aid reforms next year, including the next phase of work flowing from the Legal Aid Payment Advisory Panel’s report and the legal aid review.

"We fully support the advisory panel’s conclusions, including that fair and transparent remuneration for the services that solicitors provide is essential and that a clearer evidence base is needed to inform the development of the payment system and a process of regular ongoing review."

Society comment

The Law Society of Scotland said the drop in funding emphasised the urgent need for a long term funding plan for the sector.

Ian Moir, co-convener of the Law Society of Scotland Legal Aid Committee, commented: “The sharp fall of over £30m in this year’s Scottish Legal Aid Board annual report illustrates even more vividly the urgent need to address the funding crisis.

“Solicitors have worked extremely hard through all of the challenges presented by the pandemic to continue to advise and represent their clients. However, while closure of the courts in the early days of lockdown has undoubtedly contributed to the reduction in legal aid spending over the year, the current crisis has been a generation in the making and the system is at breaking point.

“It is vital that the Government invests properly in legal aid to help those in need and ensure that solicitors are fairly paid for the work that they do.”

Co-convener Pat Thom added: “We will continue to press the Government to secure adequate funding for this important sector over the long term and will work with SLAB to identify improvements in processes.”

Click here to access the annual report and additional documents.