Legal aid shake-up 'to cost more than half of saving'

More than half the planned savings from Justice Secretary Ken Clarke's legal aid cuts will be wiped out by "knock-on" costs for taxpayers elsewhere, a report warns today.

A study from King's College London, commissioned by the Law Society, says the NHS, courts and other state organisations will all be hit by extra demands once legal aid reforms are brought in.

It says the extra costs will eat up £139 million of £239 million in savings estimated by ministers in three key areas of legal aid - family law, clinical negligence and social welfare. The Law Society calls the reforms "kamikaze".

Mr Clarke's legal aid Bill returns to Parliament this week. It aims to save a total of £350 million from the £2 billion-plus annual legal aid bill by removing or restricting entitlement in areas such as divorce, welfare, housing, personal injury and employment.

Sums paid to lawyers will be cut and the "no win, no fee" system, which Mr Clarke argues has helped fuel speculative and unnecessary cases, will be re-formed in a bid to cut such litigation.

The report, by economics lecturer Dr Graham Cookson, claims cuts to legal aid in welfare cases are likely to worsen ill-health and stress and cost the NHS £35 million a year. The NHS will face an extra £28 million dealing with victims of clinical negligence, he claims - nearly triple the £10 million expected to be saved in this area.

More people conducting their own cases instead of using lawyers will also cost taxpayers money, it concludes.

Ministers estimate there will be some 500,000 fewer civil cases after reform, They claim legal aid has led to many disputes that could be resolved outside court escalating unnecessarily.