UK’s ‘Help with Fees’ scheme won’t define crypto as disposable income

British citizens that hope to access legal assistance through the proposed ‘Help with Fees’ (HwF) scheme will not have cryptocurrency holdings classified as disposable income.

The Ministry of Justice published its response following public consultation over its proposed legal aid scheme aimed at providing equal access to the justice system. HwF is aimed at providing financial support towards court or tribunal fees to individuals with low income and minimal savings.

The scheme intends to ensure that individuals are not prevented from accessing courts and tribunals due to an inability to afford the fees associated. The scheme’s primary objectives look to ensure access to justice for low-income individuals, provide money to taxpayers who ultimately bear the cost of fee remissions of the scheme, and ensure the scheme is accessible and eligibility criteria are clear.

Related: UK Law Commission recommends ‘distinct’ legal category for crypto

The public consultation process drew questions relating to the Ministry of Justice’s proposal to amend the definition of disposable capital to include ‘savings and investments’ with a ‘non-exhaustive list’ of examples which included cryptocurrencies.

According to the ministry, the majority of respondents support the proposal, highlighting that it helps capture investments that are not available as liquid assets.

Meanwhile, other respondents who disagreed with the specific proposal commented that applicants should not be penalized for having savings and investments, especially pensioners and self-employed individuals:

“There was also a comment that the non-exhaustive list is too vague and there should be more clarity, for example, that cryptocurrency should be included.”

The government’s response stressed that it would not propose an exhaustive list of the types of capital that would constitute ‘savings and investments’ as it would create “unnecessary risk” for all types of capital omitted or not yet developed.

“Furthermore, we confirm that cryptocurrencies are already covered by the current definition of capital under the Fees Orders, and they will continue to be covered by the proposed definition.”

The ministry plans to review its list in the public guidance accompanying HwF applications to assist applicants in figuring out whether certain types of capital are covered in its current definition.

The public response also notes that individuals that have savings or investments above a threshold of £16,000 will be expected to use these resources to pay legal fees before receiving assistance from the HwF scheme.

The UK has been inching closer to passing legislation that will bring cryptocurrencies under similar laws that govern traditional assets in the country. The Financial Services and Markets Bill is expected to give the Treasury, Financial Conduct Authority (FCA), Bank of England and Payments Systems Regulator the ability to proposed and enforce rules for cryptocurrency-related businesses.

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