Question to the Ministry of Justice:

To ask the Secretary of State for Justice, how many firms have ceased being legal aid providers since 23 April 2025.

This data breach was the result of serious criminal activity but it was enabled by the fragility of the LAA’s IT systems as a result of the long years of neglect and mismanagement of the justice system under the last Conservative Government. Upon taking office, I was shocked to see how fragile our legal aid systems were. The previous Government knew about the vulnerabilities of the Legal Aid Agency digital systems, but failed to invest. By contrast, since taking office, this Government has prioritised work to rebuild the LAA digital systems. That includes the allocation of over £20 million in extra funding this year to stabilise and transform the Legal Aid Agency digital services as we build back better in response to this attack. We are now in a position where all providers have online access to our civil legal aid services currently available via SiLAS, alongside our criminal legal aid services, which were restored in September.

This is an evolving situation but to date the total operational and digital costs of the incident are forecast to be £22 million for this financial year.

All providers have been able to access payment for work carried out whilst systems have been offline.

For some types of legal aid this meant adjusting the way in which providers submitted their claim for payment to the LAA. From 19 May, providers have been able to claim their usual payments for Legal Help, Crime Lower & Mediation work via a contingency process. Due to previous investment, the criminal legal aid systems were more modern, and internal access was restored more quickly. This enabled the LAA to resume paying Crown Court bills from early June.

It was necessary to agree a payment contingency for Civil Representation work with HM Treasury. This led to the implementation of the Average Payment Scheme on 27 May. The Average Payment Scheme enables providers to opt in to receive a temporary average payment for Civil Representation work that would otherwise be due, or where the value of their outstanding work varies from this, to apply for a specific payment to meet the cost of that work. Payments are made on a weekly basis. The weekly average payment is based on previous payments made to that provider over the 3 month period preceding the cyber incident.  Some providers have not opted in to receive payment in this way and wait for the restoration of the systems, but payments are there should they need it. We are unable to quantify the number of legal aid providers who have not opted in to receive an average payment in each of the weeks it has been available.

Providers are obligated to act in the best interests of their clients both by their own SRA regulatory requirements and by their LAA Contracts. In circumstances where a legal aid provider is unable to continue providing representation in an ongoing case, for whatever reason, they have a professional and contractual obligation toward their client to assist them in finding alternative representation.

We have not seen any evidence of legal aid providers leaving the market directly as a result of the cyber-attack. Since April 2023 there has been a net increase in the number of providers contracted to deliver legal aid services.