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This paper looks at the empirical basis for demonstrating a business case for civil legal aid and reviews the evidence base on the economic value of advice. In the context of the current public spending review, this project could not be more urgent, as all Government departments and agencies are required to show that their public expenditure is both necessary and delivers a substantive economic benefit.
The analysis looks at how adverse consequences associated with civil justice problems, and the downstream costs for other public services, can be mitigated by advice. Factors considered include homelessness prevented, poor health outcomes averted, work productivity and client financial gains. Using data from the Civil and Social Justice Survey, and the Legal Services Commission’s outcomes data from legal aid work, a suggested model is developed which estimates that:
For every £1 of legal aid expenditure on housing advice, the state potentially saves £2.34.
For every £1 of legal aid expenditure on debt advice, the state potentially saves £2.98.
For every £1 of legal aid expenditure on benefits advice, the state potentially saves £8.80.
For every £1 of legal aid expenditure on employment advice, the state potentially saves £7.13.
The paper also reviews the supporting evidence that both civil legal aid and advice services more widely can deliver some substantial savings to public services, to the wider economy, and added value to both clients and communities. Finally, there are a range of different approaches for establishing the return on investment by looking at longer term impacts and benefits to clients and communities.
In conclusion, the paper finds that a cost benefit analysis approach to legal aid policymaking demonstrates that there can be substantial economic savings to the public purse and wider economy from public funding for advice, by providing worked examples. It is also noticeable that there is a broad consensus that returns can be demonstrated from investment in advice following positive outcomes, although there is often less consensus on the most appropriate outcome measures to use. There is also a considerable body of primary and secondary research literature which supports the economic case for legal aid. However, Government makes limited use of the information they hold. Outcome measurement frameworks need to be more widely shared and agreed in order to facilitate a bigger picture. The challenge for both researchers and policymakers is to ensure that evidence demonstrating how can legal aid “pay for itself” informs best practice in commissioning, and choices in how funding is prioritised.