Another legal aid provider bites the dust

Last week the Immigration Advisory Service was placed into administration.  The IAS was the largest provider of publically funded immigration and asylum legal advice.

Clients who are able to get online will see the rather chilling message: ‘Please do NOT visit any IAS office in person, even if you had an appointment booked, as all offices are now closed to such visits’. It’s interesting to note how much less attention this has attracted compared to the demise of Southern Cross. There are no vocal concerned family members, and it’s unclear who will be able to take on the case load.

This is not an isolated incident. It comes exactly a year after Refugee and Migrant Justice closed down too. Indeed many of the same clients have been passed from one organisation to the other.

Should we worry about the fact that within a year two of the biggest and most widely respected organisations providing immigration and asylum advice have closed down because they could not work within the current funding framework for legal aid?  The Legal Services Commission don’t appear to be worried. This forms part of the new funding structure introduced following the Carter Review. It’s a step in the phased introduction of market mechanisms into the funding of legal aid. The idea is that other (private) providers can run this service better and they should be allowed to do so. If providers can’t make the funding work for them they must be inefficient.  It’s all about opening up public services.

There are several issues with the market based reforms of legal aid and we have written about this elsewhere. For now I want to focus on one of them – differences in information and power. This argument used for market efficiency works well if you are selling a private good like a restaurant (and it’s notable that many people who have advised the government on efficiency have a business background) where people have access to information about the quality of a service. If you are thinking about going to a restaurant you can be sure they have passed some basic food standards, you can look at the menu and also look at reviews online.

Legal Aid doesn’t work like this. If you’re seeking immigration advice how can you tell if the solicitor you find to represent you (if you can find a solicitor) is good quality? Who writes the Time Out guide to legal aid? If things go wrong you can’t send what you were served back or ask for a refund. It’s only apparent when it is too late.

It’s not only the case that people who need legal aid find it hard to get information on how good quality as service is. This lack of information is repeated when the government funds providers of legal aid. The government pays providers the same amount for most cases no matter what the outcome of the case or how long the provider spends on the case. They get paid the same if they provide a ‘cheap takeaway’ or a ‘proper three course meal’. Worse still it’s hard for clients and funders to know exactly what they are ‘cooking’ because high quality providers and low quality providers superficially look the same from the outside.

Differences in information and power are known as information asymmetries and are one of the key reasons why markets fail. Even the Carter Review that recommended moving towards market mechanisms recognised this, and made it clear that quality standards must be in place – this recommendation has largely been ignored.

In short the government doesn’t actually know whether the providers that are able to survive the funding changes to legal aid are the ones who are more ‘efficient’ or the ones most willing to cut quality and do a shoddy job. They urgently need to find out.