Exploring new funding models for free legal advice

Free legal advice services face acute funding challenges. As the only UK-wide funder dedicated to increasing access to free legal support, we’re exploring every avenue to create sustainable, evidence-led solutions. That’s why we’ve partnered with the Centre for Socio Legal Studies at the University of Oxford and the University of Surrey on a two-year research project examining six additional funding models and how they might work here.

Matthew Nesvet from Oxford’s Centre for Socio-Legal Studies shared insights from their research into ILCA (also known as IOLTA – Interest on Lawyers Trust Accounts). The research team is building a database of over 80 schemes across seven countries while surveying UK legal advice providers to understand how an ILCA scheme could help address funding challenges here.

Successful schemes internationally share three key features: they put money into both annual grants and reserves to sustain funding when interest rates drop, they require participation rather than making it optional, and they use rate comparability rules that generate more revenue.

There’s momentum building to explore how an ILCA model could be implemented in the UK with the Ministry of Justice consulting with legal practitioners, law firms and banks, and has held initial roundtables with legal aid practitioners to understand potential impacts.

The UK’s collective action regime, introduced in 2015 for competition law cases, creates another funding opportunity. We’ve been designated as the prescribed charity to receive these funds following trials, and we’ve already been awarded £3.8 million from the Competition Appeal Tribunal in a recent case. But settlements are more complex, there’s no automatic requirement for undistributed damages to come to us, so we advocate for this on a case-by-case basis.

That’s where the upcoming review comes in. Tesni Thomas from the Department for Business and Trade outlined their review of all aspects of the collective actions regime, including undistributed damages. They want to hear from as many people as possible about how to ensure these funds are used productively to meet the regime’s original intentions, with a full consultation likely to follow in the autumn.

This is a real opportunity to establish clearer rules around undistributed damages in settlement agreements. The more voices advocating for access to justice, the stronger the case for change.

We asked attendees to take three actions, and we’re extending that invitation to you:

1. Reference these funding models in any response to the Justice Committee’s Access to Justice Inquiry. The evidence being generated by the additional funding models research project strengthens the case for change.
2. Support our submission to the collective actions regime review by sharing your evidence with us and submitting your own response when the consultation launches.
3. Stay engaged by signing up to our mailing list to hear about new developments and ways you can support this work.