The government plans to cut an additional 10% off legal aid fees leading to fears that more law centres could face closure.
The Ministry of Justice has laid the new proposal before parliament in a bid to reduce the costs of the most expensive system of legal aid anywhere in the world.
Law for All, a legal advice charity which employed 70 personal injury solicitors and other staff has just been forced into liquidation and blames this on the anticipated reduction in fees.
The 10% cut would be on top of the 12.5% reduction imposed by the last government but the MoJ is expecting opposition to the plan when parliament resumes after the summer recess.
Law for All helped about 15,000 clients every year that would otherwise have been unable to get legal help. The charity said that government changes have led to an unsustainable administrative burden and reduced payments. The trustees have reluctantly concluded that Law for All has no viable, long-term future.
Two other charities offering legal advice have also recently been forced to close. The Refugee Migrant Justice and Immigration Advisory Service both said legal aid cuts were to blame.
The government has already acknowledged that personal injury lawyers have argued that the cuts to their fees would make it unviable to take on legal aid work. Furthermore, changes to the no win no fee system are also going to have a detrimental effect on people claiming personal injury compensation.
Steve Hynes from the Legal Action Group said he was concerned that he would see more insolvencies. The government has promised to give £20 million to help law centres but so far nobody knows where this money is going to be spent, he added.