Public Law Project reports examine the impact of financial and administrative incentives on immigration legal aid

The Public Law Project (PLP) last week published two new reports about what is terms 'misaligned incentives' in the legal aid scheme for immigration and asylum.

The 28-page How Immigration Legal Aid is Paid: Fixed fees and the Incentive to Do Less can be downloaded here.

It focuses on the Immigration Contract, under which providers are largely paid through fixed fees for specified types of work. It argues that, because the amount paid can depend more on the type of case than the time required, providers may have a financial incentive to complete cases quickly and take on a high volume of work.

PLP describes this as a "supermarket model" of legal aid provision, in which simpler and more predictable cases may be more commercially attractive than complex or time-consuming ones. It says the Immigration Contract "envisages a 'stack 'em high, sell 'em cheap' model of service delivery". However, the report makes clear that it is examining the incentives created by the payment system, rather than suggesting that legal aid providers routinely behave in this way, noting that any providers operate on a not-for-profit basis.

Safeguards intended to prevent providers from doing too little work on fixed-fee cases are also examined. The report says that these measures do not fully address the incentives created by the system, while more complex cases can carry greater compliance risks when providers seek additional payments for work beyond the fixed fee.

PLP concludes: "Fixed fees were introduced with good intentions: to disincentivise providers from spending unnecessary time on a case; to improve the efficiency of providers' businesses; and, most importantly, to reduce the cost of administering the simplest kinds of work. But the Immigration Contract's fee structure is poorly calibrated for achieving these aims: it fails to safeguard against cherry-picking simple cases and it remains administratively burdensome.

"The risk of this system is that it produces a distribution of legal aid which is based on administrative convenience rather than an assessment of need. Demand for immigration and asylum legal aid services far outstrips supply.108 So, the providers of those services are being asked to perform a kind of social rationing: they are simply unable to help all their prospective clients secure the funding they are entitled to. And immigration and asylum legal aid providers are under intense commercial pressure. The reality for many is that they simply cannot afford to ignore financial incentives. So, more providers may seek to stack cases high and deal with them cheaply."

PLP second report, the 35-page Assessing Eligibility for Immigration Legal Aid: Why Some Cases are Harder to Take On, can be downloaded here.

It examines why some people who are eligible for immigration legal aid may find it harder to secure representation than others. It argues that the legal aid system creates a hierarchy of eligible cases, with some proving more administratively burdensome, slower to generate payment or more exposed to the risk of providers not being paid.

PLP focuses on the three main areas or 'gateways' of eligibility - scope, means and merits - and considers what providers must do to establish eligibility under each gateway.

On scopes, the report highlights exceptional case funding (ECF). It finds: "Providers are disincentivised from using the ECF scheme because is administratively burdensome and often requires work to be done at risk of non-payment. As a result, providers have a financial incentive only to take the kinds of work that government has prioritised – and the ECF scheme is at risk of being an ineffective and illusory guarantee of fundamental rights."

Means, or financial eligibility, can present practical barriers even where someone is entitled to legal aid. The report notes that asylum seekers may struggle to provide evidence of their financial circumstances, particularly while waiting for decisions on asylum support. It also highlights the difficulties some people face in demonstrating that assets held overseas are inaccessible, and says providers may be discouraged from offering early advice before an asylum support application has been determined.

Merits, the report finds, becomes particularly significant when a case moves from Legal Help to the Controlled Legal Representation stage. Providers must carry out a more detailed assessment of whether a case has sufficient merit, which can result in representation ending at a point when a client needs it to continue. The report also highlights the financial pressure created by delays in payment for First-tier Tribunal work.

Overall, the report concludes that the Immigration Contract establishes a hierarchy of eligible work, disincentivising cases that are more administratively burdensome, slower to be paid for, or more exposed to the risk of non-payment.

It states: "This is likely to influence how legal aid is distributed among the eligible population, for two reasons. First, demand for immigration and asylum legal aid services far outstrips supply. So, the providers of those services are being asked to perform a kind of social rationing: they are simply unable to help all their prospective clients secure the funding they are entitled to. Second, immigration and asylum legal aid providers are under intense commercial pressure. The reality for many is that they simply cannot afford to ignore financial incentives. So, when performing this social rationing – and determining who gets access to legal aid – priority may be given to those cases and those clients who are least burdensome and least risky."

As PLP notes, both reports argue that the immigration legal aid scheme does not sufficiently align the interests of providers, the Legal Aid Agency (LAA) and people seeking legal help. The reports conclude that these interests do not have to be in conflict, and that the system could instead be reformed so that providers and the LAA are incentivised to make decisions that better reflect the needs of those relying on legal aid.