In a recent announcement by the Ministry of Justice, it has been clarified that British citizens hoping to access legal assistance through the proposed “Help with Fees” (HwF) scheme will not have their cryptocurrency holdings classified as disposable income. The HwF scheme is aimed at providing financial support for court or tribunal fees to individuals with low income and minimal savings, with the primary goal of ensuring access to justice for those in need.
Public support and controversy surrounding the proposal
The Ministry of Justice’s proposal to amend the definition of disposable capital to include “savings and investments,” including cryptocurrencies, drew significant attention during the public consultation process. The proposed change raised questions about whether applicants with savings and investments, such as pensioners and self-employed individuals, should be penalized for seeking legal aid.
In response to the proposal, the majority of respondents expressed support, emphasizing that it helps capture investments that are not readily available as liquid assets. However, there were dissenting voices as well, with some arguing that the non-exhaustive list of examples was too vague and lacked clarity, particularly regarding the inclusion of cryptocurrencies.
The government’s official response emphasized its intention not to propose an exhaustive list of the types of capital that would constitute “savings and investments.” The Ministry of Justice reasoned that doing so could create unnecessary risk by potentially omitting or failing to account for capital types that may emerge in the future.
Furthermore, the government confirmed that cryptocurrencies are already covered by the current definition of capital under the Fees Orders, and this coverage will continue under the proposed definition. This clarification aims to provide assurance to those concerned about the treatment of cryptocurrency holdings within the legal aid assessment process.
Review of guidance for HwF applicants
In response to the public’s feedback, the Ministry of Justice announced plans to review its guidance for HwF applicants. The goal is to assist individuals in determining whether specific types of capital, including cryptocurrency, are covered by the existing definition. This effort reflects the government’s commitment to transparency and ensuring that individuals have a clear understanding of the eligibility criteria for the HwF scheme.
It was also revealed that individuals with savings or investments exceeding a threshold of £16,000 will be expected to utilize these resources to cover their legal fees before becoming eligible for assistance from the HwF scheme. This threshold is part of the assessment process to ensure that the scheme is targeted toward those with limited financial means.
Cryptocurrency regulation in the UK
The United Kingdom has been progressively moving toward implementing legislation that would subject cryptocurrencies to similar regulations as traditional assets in the country. The Financial Services and Markets Bill is currently under consideration and is expected to grant the Treasury, Financial Conduct Authority (FCA), Bank of England, and Payments Systems Regulator the authority to propose and enforce rules governing cryptocurrency-related businesses.
