Imagine a world without lawyers. A thought that usually evokes more cheer than concern, as we rank alongside estate agents and politicians in the popularity stakes. However, in many parts of the country, contrary to the popular image of throngs of ambulance chasers, it's becoming as hard to find a legal aid lawyer as it is an NHS dentist.

The irony is that this month heralds the fifth anniversary of the Community Legal Service, the new framework for providing publicly funded legal services set up by New Labour in 2000, with the aim of ensuring local networks of good quality advice based on local need. The reality is that firms working in fields most closely related to social exclusion - such as housing law, domestic violence, welfare benefits and debt advice - are steadily going out of business.

In 1999/2000 there were 8,900 solicitors firms who received at least some public funding for family law work. By March 2002, there were only 3,800. There has similarly been a marked fall in the provision of publicly funded advice on housing issues. The result is that in some parts of the country a battered wife will not be able to find a legal aid solicitor to help her obtain an injunction against a violent partner; families have to travel for hours to obtain advice about child-care proceedings; and when vulnerable people, including the very young and the elderly, face eviction, there is increasingly no one to offer legal support.

Research by the National Association of Citizens Advice Bureaux found that 39% of its members describe their local area as an "advice desert", with around 60% reporting difficulties in finding law firms conducting publicly funded housing and family law work that can take up a case when legal support beyond the scope of the CAB is required.

Part of the problem is that in order to drive legal aid costs down, solicitors' firms have to win contracts if they are to continue providing publicly funded work in a particular field. No one could argue against the benefits of having quality control, but the present system does not measure the fact that a particular firm leaves no stone unturned in fighting their client's case, but instead places emphasis on administrative procedures and output of cases. This is demoralising and ultimately financially unsupportable for the diligent solicitor. The result is that too often the good firms are forced out of the market place.

Recent moves towards block contracting - where a firm will be paid a fixed fee for conducting all of the work in a certain area - will place even greater pressure to cut corners, as the fee will be fixed, no matter how much work is done on a case.

These developments, together with recent proposals designed to divert cases out of the justice system altogether and into alternative forms of dispute resolution, create a real danger of a two-tier system of justice: access to the courts for those who can afford it and some form of settlement for those who can't. Of course, avoiding the emotional and financial cost of litigation can be beneficial, but it is often only the threat of legal action that will induce a recalcitrant landlord to carry out necessary repairs, or a local authority to negotiate provision of special needs assistance to a disabled child. Once the possibility of enforcing legal rights is no longer in the background, there is very little incentive for the more powerful party to negotiate.

Quite apart from the undoubted injustice, leaving vulnerable people without legal support doesn't even make good economic sense. The total legal aid budget (which includes criminal cases) makes up less than half of 1% of total public spending. And yet effective resolution of problems at an early stage, through the courts where necessary, plays a vital role in stopping accelerating social exclusion and the knock-on costs of increased crime, long-term unemployment and dependency on welfare and health services.

Nor is this problem limited to only a small number of people at the very margins of society. Research by the Legal Research Centre indicates that 37% of adults experience problems at one time or another which fall within the scope of the civil legal system.

When the civil legal aid scheme was introduced in 1949 with the Legal Aid and Advice Act, its aim was "to provide assistance . . . and legal advice for those of slender means and resources so that no one will be financially unable to prosecute a just and reasonable claim or to defend a legal right". It was an essential accompaniment to the welfare state. It is inconceivable that half a century later legal rights should become the preserve only of those who can afford them.

Baroness Helena Kennedy QC is speaking at a public meeting organised by the Access to Justice Alliance, at City University, London, on Saturday accesstojustice2005@yahoo. co.uk