The Government's plans for drastic legal aid cuts have been confirmed today by Justice Secretary Ken Clarke, alongside wholesale backing of the Jackson reforms of civil litigation costs.

The plans were unveiled today (21 June) in the new Legal Aid, Sentencing and Punishment of Offenders Bill, with the Government ploughing ahead with previously laid-out cuts in a bid to significantly reduce its £2.1bn annual legal aid bill.

The bill also confirms the Government's intention to implement Lord Justice Jackson's recommendations to cut civil litigation costs.

The reforms include the abolition of the recoverability of success fees and associated costs in 'no win, no fee' conditional fee arrangements, with claimants to pay their lawyers' success fees instead.

The legal aid cuts will affect welfare benefits, clinical negligence, personal injury, debt, divorce, employment, immigration, and housing, including squatters resisting eviction.

Legal aid will also no longer be available for those seeking compensation under the Criminal Injuries Compensation Scheme.

However, as outlined by the Ministry of Justice last November, legal aid will remain available for cases involving threats to liberty, physical safety, child welfare or the immediate threat of homelessness.

Justice Minister Jonathan Djanogly said: "The justice system is in need of urgent reform, burdened as it is by slow, inefficient and expensive processes and procedures, as well as the sheer numbers of people bringing their problems before the courts.

"These reforms will ensure that we have a legal aid system which is targeted at those who need it most, in the most serious cases, as well as providing value for money to the taxpayer."

The bill also addressed criminal sentencing, with the Government ditching Clarke's controversial proposal of a 50% sentence reduction for early guilty pleas, and offering no further discount in this instance.

Market reaction

"The Government just isn't listening. Hundreds of different groups have warned that its proposals will be a hammer blow to some of the most vulnerable people in our society, yet the Secretary of State is pushing on with his devastating reforms regardless of the consequences and delivering a major double whammy to consumers. Not only is he slashing legal aid but he's also attacking access to justice through a radical restructure of legal funding which will force thousands of injured people to pay significant sums in legal fees out of their hard-won compensation. This will deter many from bringing legitimate claims."
Stuart Henderson, managing partner for personal injury, Irwin Mitchell

"Looking behind the headline-grabbing changes in relation to legal aid and sentencing in the Justice Bill, the changes in relation to litigation funding and costs are consistent with those foreshadowed in the MoJ consultation, but the devil will be the detail. As expected, the recoverability of success fees will be abolished but there will be a safety mechanism in the form of a cap on success fees, which will be a percentage of damages awarded. The Lord Chancellor is unlikely to specify the level of this cap until after the Bill is passed and this important detail will not be debated in Parliament. The Lord Chancellor will be required to consult with the legal profession before making an order but it is clear that any battle over the details is some way off."
Rani Mina, commercial dispute resolution partner, Mayer Brown

"In so far as the Bill relates to civil litigation it contains no surprises. We are however disappointed that the Bill has not clarified the position in regard to offers to settle and seems to contradict the Ministry of Justice's earlier announcement in March that the rules governing Part 36 offers would be amended, reversing the effect of the decision in Carver v BAA plc. In our view the draft S51 makes the position less clear and will inevitably result in satellite litigation."
Seamus Smyth, president of the London Solicitors Litigation Association

"It's good to see the Government sticking to its guns on implementing the core principles of Jackson's recommendations; businesses and consumers will benefit from this control of disproportionate legal costs. We do, however, need to see delivery of the second phase of the Jackson reforms, in which legal costs in low value personal injury cases are fixed and the process for paying compensation is simplified. That will help put claimants with genuine claims at the centre of the process."
Andrew Parker, head of strategic litigation, Beachcroft