Family mediation funded by legal aid

The new arrival of ministers continues the dialogue we are having with the government, where we argue that legal aid and family mediators play a vital role in supporting families to resolve disputes amicably, often avoiding the need for stressful and costly court battles. However, what needs to be acknowledged and understood is the significant challenges that threaten the sustainability of family mediation funded by legal aid. One pressing issue, brought to Resolution’s attention by one of its members, is the financial impact when a private-paying client becomes eligible for legal aid partway through the mediation process. This policy inconsistency, outlined by the Legal Aid Agency (LAA), creates yet another unfair financial burden on mediation providers.

In this column we explore the scope of the problem, its implications, and the steps Resolution is taking to ensure fairness and sustainability for mediators who offer legal aid.

What is the issue?

Unlike other areas of legally aided work, family mediators must refund all private fees charged to a client who becomes eligible for Legal Aid during mediation, as the fee is known as a “whole case” fee. However, family solicitors using legal aid funding can keep their private fees and transition the client to legal aid funding seamlessly. Why are family mediation providers being treated differently? This discrepancy puts unnecessary financial strain on mediators, who are already working within the tight constraints of legal aid contracts.
One Resolution member reported refunding over £30,000 in private fees last year due to this policy. Such a financial hit makes it nearly impossible for small or medium-sized practices to remain viable, forcing them to consider withdrawing from legal aid work altogether. Given the recent reduction in mediation contracts, following the conclusion of the tender process, access to mediation for families who rely on legal aid funding would yet again be unreasonably impacted.

Case study: A real-world example

To illustrate the issue, let’s consider the case of John and Mark (names changed for confidentiality):

• John and Mark are divorcing and are in conflict over financial arrangements. John initiates the process by attending a Mediation Information and Assessment Meeting (MIAM), paying privately.
• Mark then agrees to participate and attends his MIAM and is also a privately paying client.
• John and Mark pay privately for out-of-hours mediation sessions on a Saturday morning and also for the preparation of the Open Financial Schedule.
• During their third mediation session, the mediator determines that Mark is eligible for legal aid due to a change in his financial circumstances. The “whole case” is now funded for him, including his MIAM.
• Mark’s legal aid eligibility also means John becomes covered for their first mediation session as well as his initial MIAM appointment.
• Because legal aid funding has been claimed, the mediator has to refund Mark all his fees paid for his MIAM, his first and second session, the fees he paid for the Open Financial Schedule, and John for the fees he paid for his MIAM and first mediation session.
• This is despite these fees being charged fairly to reflect the higher cost of private mediation, and out-of-hours urgent work. The legal aid rate reimbursed to the provider is significantly lower than the private rate, leaving the mediator with a financial loss.
• To make things worse, the mediator has to spend time uploading reports to the LAA (in their unpaid time) and may incur banking charges.

When cases like this happen repeatedly, it places providers under immense financial pressure. The fees returned in the case above represent a salary.

Why is this happening?

The guidance from the LAA states: “If a client was not eligible for legal aid at the start of the mediation but becomes eligible, any privately paid fees must be refunded if the case is claimed under legal aid.”

However, this directive is not explicitly mandated by the Civil Legal Aid (Procedure) Regulations 2012 or the Standard Civil Contract 2024 Mediation Specification. There appears to be a policy gap that unfairly penalises mediation providers, creating an imbalance between how mediators and legal professionals are treated under the same funding framework.

Resolution’s position

Resolution is actively advocating for a review of this guidance to establish parity between mediation and legal services. Specifically, Resolution is calling for:

1. The Right to Retain Private Fees: Mediation providers should be allowed to retain fees already charged before transitioning a client to legal aid.
2. Fair and Transparent Regulations: Guidance from the LAA must align with existing legal frameworks, removing ambiguity and ensuring equitable treatment of all providers.
3. Support for Legal Aid Mediators: The LAA should recognise the vital role mediators play in reducing court pressures, and support their financial sustainability.

The broader implications

Failing to address this issue risks reducing the pool of legal aid mediation providers, leaving families with fewer options for resolving disputes outside of court. At a time when court backlogs are at an all-time high and the need for mediation is critical, these financial pressures could push many skilled mediators to abandon legal aid work altogether.

This is not just a challenge for providers—it’s a systemic issue with far-reaching consequences for families who rely on affordable and accessible mediation services.

What needs to change?

Resolution is urging the LAA to take immediate action by:

• Reviewing the current guidance to allow mediators to retain private fees already collected.
• Updating the Civil Legal Aid (Procedure) Regulations to explicitly address the financial implications for mediation providers.
• Engaging with family mediators to understand the real-world challenges and ensure future policies reflect their needs.

By making these changes, the LAA can create a fairer system that supports both mediators and the families they serve.

Conclusion

Family mediators are indispensable in helping families navigate disputes constructively, yet the financial realities of legal aid contracts often undermine their ability to continue this vital work. The current guidance on private-to-legal aid transitions disproportionately affects mediators, creating an unsustainable financial burden.

Resolution stands firmly with its members, advocating for change to ensure that mediators are treated equitably and that families continue to have access to quality mediation services. By addressing this issue, the LAA has the opportunity to strengthen the family mediation sector and support countless families in resolving conflicts outside of court.

If you’re a mediator impacted by this issue, we encourage you to share your experiences with our committee. Together, we can create a more sustainable future for family mediation.

[email protected]

[email protected]