Mixed Funding Funding for Free Legal Advice and Services

Oxford Gives Evidence to Parliament's Justice Select Committee on Using Bank Interest on Lawyer Client Accounts to Fund Access to Justice

Click Here to Read the Evidence Sent to Parliament

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Oxford Centre for Socio-Legal Studies provides evidence to the Justice Select Committee Inquiry into Access to Justice

In July of last year, the Justice Select Committee launched an inquiry into access to justice which covers a number of issues being explored by a team of researchers based at the Oxford Centre for Socio-Legal Studies. The research in question is being funded by the Nuffield Foundation for two years from July 2025 and is being led by Professor Linda Mulcahy and Matthew Nesvet in partnership with the Access to Justice Foundation and Professor Neil Rickman at the University of Surrey. The focus is on examining a range of international models with the potential to increase funding for free legal advice. The research team submitted a 30-page report which analysed newly accumulated data to the inquiry during its consultation process.

The research team is particularly keen to draw attention to the in-depth qualitative and quantitative research they have been undertaking with a view to fuelling evidence-based policy debate about the ‘Interest on Lawyers Trusts Account’ (IOLTA) programmes, which operate in 78 other jurisdictions across the world. Linda Mulcahy explained:

Since severe cuts to the legal aid budget were introduced in 2013 the free legal advice sector has been in crisis. There is an urgent need to find additional ways of funding their work which serves to uphold the rule of law and ensure that everyone has access to justice. The free legal advice sector, which is made up of law centres and advice clinics across the country, frequently intervenes to help people during times of crisis and to prevent a downward spiral in their fortunes. Not only are these centres having to shut down, but there is a danger of their specialist skills not being passed on to a new generation.

In other jurisdictions such as the US, Australia and Canada, IOLTA programme have developed to support the free legal advice sector. These schemes collect the many small amounts of interest which accumulate on client money temporarily held by solicitors and reinvest it in Access to Justice Foundations designed to support free legal advice and other initiatives. The project is also exploring other funding initiatives such as residual funds in collective actions, better used of the apprenticeship levy and legal expenses insurance as part of a new mixed funding portfolio initiative.

Further details of the evidence submitted to the Inquiry can be found here.

New ruling will make available additional income stream for free legal advice givers

A recent ruling by the Competition Appeal Tribunal about fees wrongly levied on consumers by Mastercard means that millions of shoppers could benefit from the settlement reached. Significantly for our alternative funding model research project, the judgement also made clear that any unclaimed cash from the settlement should go to the Access to Justice Foundation as the "prescribed charity to received undistributed funds" under the Consumer Rights Act. Clare Carter, chief executive of the Access to Justice Foundation and a sector partner on the research team, said it has "already begun working with partners to ensure any unclaimed money gets distributed to charities that will improve access to justice for those that need it the most".

Unclaimed funds in collective actions is one of the schemes that the alternative funding model project is looking into as a way of boosting the financing of free legal advice.

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May 2025: Preservation of Apprenticeship Levy

The government has recently confirmed that it will preserve funding for the apprenticeship route to becoming a solicitor: https://www.gov.uk/government/news/next-generation-of-builders-and-carers-set-to-rebuild-britain. The levy is a UK tax on employers with an annual pay bill of more than £3 million, which is used to fund apprenticeship training. The firms involved can use this levy to invest in apprenticeship training for their workforce or transfer up to half to other companies so that they can use it for that purpose instead. This raises issues of direct relevance to our work on alternative funding models for free legal advice providers, as those providing free legal advice services can benefit from transferred funds. The incentive for firms to transfer funds they do not use is that if the money is not used within two years it has to be given to the Treasury.

The apprenticeship levy is one of the six schemes our alternative funding models project is investigating and is of value because it can support capacity building in the free legal advice sector. There is currently a lack of any in-depth data on the apprenticeship levy, a gap which our project seeks to fill.

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Cy-Près or Next-Best Justice? Rethinking Residue Distributions in Collective Actions

Professor Suzanne Chiodo critiques the use of cy-près distributions in collective actions, especially in the Merricks case. She argues that while cy-près aims to deter wrongdoing, it often fails to benefit class members directly, instead supporting general charities. Chiodo emphasizes that compensation for class members should remain the primary goal in collective proceedings.

Read the full post here

Law Society Gazette Article on Client Account Interest

An article discussing the implications of law firms retaining interest on client accounts, highlighting the ongoing debate and regulatory considerations.

Read the full news article

New Research Report: 'Regulatory Leadership on Access to Justice'

A new research report by Liz Curran, Jane Ching, and Jane Jaman, calling for the exploration of alternative funding streams to enhance access to justice.

Read the full report

Why Finding New Ways to Fund Legal Advice is Important

The legal advice sector supports the most vulnerable in society. Funded through private, public and charitable funding, its funding is widely agreed to be in a state of crisis. This crisis is impacting access to justice. This research will explore potential creative and supplementary funding models to create a more sustainable future for legal advice and support. Which funding model can end the crisis in funding for legal advice?

Residual funds from collective action cases;
Interest on Lawyer Trust Accounts (IOLTA);
Legal expenses insurance;
Levies on large commercial law firms;
The apprenticeship levy; and
Re-direction of dormant client monies.

About the Project

This two year research project, launched in Spring 2025, is funded by the Nuffield Foundation. It takes the form of a research collaboration between the University of Oxford's Centre for Socio-Legal Studies, the Access to Justice Foundation, and the University of Surrey. The project is exploring a range of funding models operating successfully in other countries, which could be transplanted to the UK to support the work of organisations providing free legal advice.

The research that we are undertaking is informed by stakeholder engagement workshops involving jurisdictional experts, lawyers, advice providers, financiers, regulators, insurers, economists and academics. The project will result in an open-access database, policy briefings, an accessible project report with practical recommendations, and widespread dissemination of findings.

Our thanks go to Thomson Reuters and Dechert LLP pro bono teams for supporting us during the pilot stage of this research.