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Gove’s City firm levy has receded for now

By Chloe Smith »

(24 March 2016)

The government’s plan to impose a levy on top firms to help fund other parts of the justice system has been put on the back-burner, the Gazette has been told. David Hobart, chief executive of the City of London Law Society, said that the idea of introducing a levy has now ‘receded’, but he doubted that the option has been completely dropped. Lord chancellor Michael Gove floated his controversial plan to make City firms plug the justice funding gap either via a levy or mandatory pro bono in a speech last June. Gove suggested that more could be done by ‘the most successful in the legal profession to help protect justice for all’. The government justified the idea of a levy on the basis that the reputation of the English legal sector was built on its high-quality judges, who primarily come from the publicly funded bar. But the City lobbied against this interpretation, pointing out that the judiciary in the Supreme Court is largely made up from the commercial bar, while large firms have themselves promoted the reputation of the English legal system internationally. Hobart said the theme of making those who have benefited from the legal system fund the parts that are under pressure is not going to go away. But he suggested that any sort of ‘wealth tax’ would have to be applied across all business sectors. Hobart also said it is now unlikely that the government would mandate pro bono targets and that it is more likely firms themselves will do more to increase their contributions voluntarily. A spokesperson for the Ministry of Justice said: ‘The justice secretary has been clear that those who benefit financially from our legal culture must do much more to help protect access to justice. We have begun constructive discussions with the sector about how we can best achieve this aim.’

[Courtesy – The Law Society Gazette]