UK legal sector 'now worth £26bn a year'

This article titled “UK legal sector ‘now worth £26bn a year'” was written by Owen Bowcott Legal affairs correspondent, for theguardian.com on Tuesday 22nd March 2016 12.23 UTC

The booming UK legal sector grew at the “phenomenal” rate of 8% last year and is worth almost £26bn, according to research commissioned by the Law Society.

The rapid increase is partially due to the growth of London as the international jurisdiction of choice for feuding oligarchs, disputatious oil-producers and aggrieved ex-wives seeking more lucrative divorce settlements.

An estimated 370,000 people are now employed in legal services, according to analysis by Oxford Economics and Cambridge Econometrics. Nearly two-thirds of them work in solicitors’ firms.

The overall expansion has come despite deep cuts to legal aid which have forced many claimants, including those involved in family separations and childcare cases, to represent themselves in court.

Export earnings from legal services have grown by an average of 5.6% a year over the last decade and now amount to £3.6bn annually – helping to offset the country’s overall balance of payments deficit.

Catherine Dixon, chief executive of the Law Society of England and Wales, said: “The provision of expert legal services is fundamental to the success of business and commerce and underpins the very fabric of our society.

“The total value of legal services to the economy is £25.7bn. The sector grew by 8% from 2014 to 2015. This is a phenomenal success story which we should celebrate.”

The analysis found that 8,000 new jobs are created and £379m is added to the economy for every 1% growth in the UK legal services sector.

A small but significant element of legal sales was the £1.3bn spent on compensation and fees involving NHS clinical negligence cases. Around £16.8bn came from business-related cases.

“Extra spending on legal services has the potential to generate significant additional spending and jobs across the economy,” the report notes.

Solicitors are worried that a proposed move towards online civil justice, in which lawyers would not necessarily always be involved, and continuing government austerity may result in businesses – rather than individuals – becoming ever more dominant purchasers of legal services.

In a related development, family lawyers have written to the Legal Aid Agency calling for it to delay the introduction next month of compulsory use of the online Client and Cost Management System (CCMS) which permits access to civil legal aid.

The letter from Resolution, which represents family lawyers, claims that the online portal keeps breaking down. Elspeth Thomson, who chairs Resolution’s legal aid committee, said: “We have had an overwhelming response from legal aid lawyers on the ground, who are working with some of the most vulnerable members of society to help them get access to justice. They are telling us that CCMS is not working as it should or, on some days, working at all.

“When the government announced last month that 86 courts across England and Wales [will close], we were told that savings would be used to modernise remaining courts, including greater use of technology. On the evidence of CCMS, together with the Form E fiasco late last year, practitioners are not exactly brimming with confidence about this prospect.”

Meanwhile the Ministry of Justice has said it will review the way in which victims of human trafficking and modern slavery can obtain access to legal aid to sue those responsible for their exploitation.

It follows the department’s decision not to fight a claim brought by the Anti-Trafficking and Labour Exploitation Unit that challenged the provision of legal aid following recent cuts.

The charity was represented by Shu Shin Luh, a barrister at Garden Court Chambers who acted pro bono for it. “If the government wants to realise its commitment under the Modern Slavery Act to providing victims of trafficking and modern slavery a right to seek reparations from their traffickers,” she said, “then it must ensure that there is a system in place which gives victims effective and practical access to legal advice and assistance to realise their rights. This hasn’t happened to date.”