Delayed payments are the real cause of RMJ collapse, says Law Society

18 June 2010

The Law Society has hit back at government claims that the inefficiencies at the Refugee and Migrant Justice charity has led to its collapse. The Society says the way payments are made to organisations such as RMJ was a major factor in bringing it to its knees.

Law Society Chief Executive Desmond Hudson says:

"It is clear that the Legal Services Commission's payment structure, which leads to payment for work only being available many months or even years after the work is done, was at its lowest a major contributing factor in the collapse of RMJ. We have seen no evidence that the inefficiencies the government have hinted at were a significant issue.

"It is inaccurate to say, as the government has said, that all other organisations have coped. Two Law Centres - Gateshead and Cambridge - have closed in the past couple of years, partly because of this cash flow problem. Firms are also suffering, and have coped generally by increasing borrowing or reducing drawings.

"It is perhaps significant that last year, both the LSC and Lord Bach, the then legal aid minister, accepted the argument that the immigration stage billing arrangements were not adequate and should be changed, and indeed the first draft of the 2010 contract included greatly improved arrangements, but these were reversed expressly and solely because of the financial constraints the LSC is working under.

"Thousands of clients will suffer from the loss of this well-respected organisation. This has happened because the previous government ignored the point we have made repeatedly over the past few years that those giving advice to the vulnerable cannot reasonably carry the levels of work in progress the system demands. We would urge the new government to put right the mistakes of the old, by establishing sensible commercial terms for the delivery of this work. Hopefully they can stop this happening to other respected advice organisations and their clients."