Legal aid solicitors overpaid by £77m
Legal aid solicitors have been overpaid by almost £77m, according to a report published today by public spending watchdog, the National Audit Office.
Qualifying the Legal Services Commission’s accounts for the second year running, the NAO estimated a total of £76.5m had been overpaid to legal aid providers in 2009-10; up from an estimated £24.7m in 2008-09.
The NAO said solicitors had overclaimed £43.6m, while £32.9m was erroneously paid to claimants without evidence that they were eligible to receive legal aid.
It said in many cases the error resulted from an incorrect claim by the solicitor regarding the level of fee.
The highest level of error was in relation to family and immigration claims, where 35% of the claims examined were incorrect or not fully supported.
Head of the NAO Amyas Morse said the LSC faces ‘significant challenges’ in administering a complex legal aid system in a cost-effective way.
He said: ‘In an environment of much tighter resources and significant staff reductions, although disappointing, it is not surprising that many of the problems I identified in my previous report have continued this year.
‘The commission has recognised the need to strengthen its financial management and I welcome the action that it has taken so far.’
However, Morse added: ‘There needs to be a sustained focus at senior levels within the organisation in order to deliver its financial stewardship plan, as well as the cultural changes necessary to support effective financial management across the commission’s activities.’
LSC chair Bill Callaghan said: 'Over the last year we have made significant changes to our financial management and this has led to better audit trails, risk management and the recovery of money.'
He said: 'Most providers do an excellent job in delivering legal aid and managing their business. However, a small minority continue to over- or mis-claim for the work they do. This impacts the legal aid budget significantly each year and can’t be tolerated.'
Callaghan said the LSC had introduced more stringent eligibility checks and put in place a programme to audit providers where billing anomalies occur, and would continue to invest time and money to help providers improve the accuracy of their claims.
'In the long term we plan to introduce automatic, electronic checks and controls that are less resource intensive,' he said.
Law Society chief executive Desmond Hudson said it was unclear ‘how a simple file review can determine what is the right judgement in individual cases’. He added that the Society had ‘complained long and loud about the unnecessary complexity of this system’, and offered ‘time and time again’ to work with the NAO and the LSC to find a ‘simpler, more transparent and cheaper way of distributing public money. That offer remains on the table.’
Comments
Simply too complex
The main problem is the sheer complexity of the system, combined with frequent changes. Many rules are far from clear and official guidance is on occasion incorrect. I teach a series of billing courses and it takes approx 30 hours of training to do the topic justice. There are also over 1000 pages of "guidance". As change has crept in so have vagaries and inconsistency. it should be a LSC priority to simplify the billing process, particularly those parts that are outside of EPF assessment.
"overspend"
Andrew Keogh is of course correct. The LSC has failed to create a system that is proportionate to the fixed fee claimed. The outcome codes are wrong. The guidance is unclear. The LSC itself doesn't quite know what is going on and when asked one is given differing answers.
The LSC should own up to the reality which is that the system it has created is utter rubbish. Of course the default position is to blame Solicitors and to imply wrong-doing.
There is also the inconsistency which allows the CLA to give 2 hours advice without obtaining proof of income whereas Solicitors must get inordinate amounts of evidence (short of a DNA profile) before giving advice and claiming £60
Rant...sorry
I am teetering on the edge of utter fury and hysterical laughter at the propaganda in this report which portrays legal aid solicitors, yet again, as 'overclaiming' fat cats. The implication is that we have been fraudulently stuffing our pockets full of large wads of taxpayer's hard earned cash for work we haven't really done. If that's the case, why are we not all being hauled before the SDT? Are these reporters actually government flunkys being paid to spout this stuff without qualification? If those reporting in the media had the integrity to investigate and report on the finer details, then the report would also explain just how the solicitors had 'overclaimed'. In family cases, firms have been made to pay back the money they have supposedly 'overclaimed' in any case where they have had the temerity to get the job done to the satisfaction of the client via telephone calls and email. If they saved their client the trouble and expense of coming to their office for a second face to face meeting after the initial appointment, then no matter how complex the financial settlement or child contact arrangements negotiated subsequently or how pleased the client with the outcome, the solicitor was 'overclaiming' if they did the job more efficiently by not insisting on a second face to face meeting yet unwittingly still claimed the level 2 fee for dealing with a 'significant dispute'. This second meeting requirement was buried in the small print of the lsc contract when the fixed fees came in, was not flagged up at any of the training sessions, and never commented on until the first audit of the 'new' fixed fee regime some 3 years in!! Deliberate move? Hmm. Of course, efficiency is the very thing the govt and lsc now say we should all strive for (as if we didn't anyway being business people) and the lsc openly admits that the second face to face meeting requirement in the current contract is unjustifiably inefficient and will be done away with next time round (as will everything else to do with legal aid!!). However, they insist that at present they are contractually bound to seek repayment of the 'overclaimed' level 2 fee. How convenient! And it's total rubbish of course. They could choose the morally correct option but they won't as they see an opportunity to claw some money back from those at the coalface who have actually done the job and helped resolve clients' problems, whilst at the same time justifying further cuts to legal aid by portraying solicitors in the media as fat cats, yet again (yawn). They also say they have a duty to the taxpayer, but I bet in the long run they'll spend more taxpayers' money on admin and auditing trying to claw it back than they will actually claw back, but then logic, common sense and fairness have always evaded the lsc, why start applying them now!! If the public were given this information, however, I would hope they would start to see just how often they only get half the story, and then slanted to suit those with their own agenda. Joe Public, you may get your joy of seeing some of these nasty so called fat cat solicitors go out of business, but with them will go anyone to help you in your own time of need, as will the jobs that these nasty solicitors currently provide to some of your family and friends. You'll miss us when we're gone!
Legal Aid "Overpayments"
The LSC does not sufficiently clarify, understand and/or apply its own rules and guidance (which has frequently changed over the years).
It audits files billed when one set of guidance was in force on the basis of amended guidance issued post bill submission.
The NAO spends taxpayers' money justifying its own existence by demonstrating that another quango is inefficient.
Who ends up paying? The taxpayer and the legal profession.
This is utterly stupid, defenceless and senseless waste, in the face of the biggest financial crisis for decades.
If the LSC published its rules and guidance in a competent fashion, simplified the labyrynthine fees system, trained its staff properly. applied its rules and guidance efficiently and properly, and maintained proper, complete and accurate records of the actions of its own staff there would be no need for stewardship audits, UPOAs, audits by the NAO, handwringing by LSC and government, lawyer bashing in the media, comments like these on this website - and we could all get on with what we are trained, qualified and want to do - serving the interests of our clients instead of wasting time and money trying to make sense of the insensible - all at much reduced cost.
But that really is too simple for those holding the power to grasp.
NAO Audits
I have recently had the dubious pleasure of being subjected to one of the LSC's NAO Audits. It seems the LSC's default position is that anything claimed has been claimed in error.
The audits, as some more senior members of the LSC's staff have admitted to me are carried out by inexperienced, temporary staff. The idea of 'reasonablness' has gone out the window. The auditors is looking for any excuse to disallow items in order to justify their own existance. After numerous letters and appeals and about two weeks work on my part the result was an overall reduction of £1.05!!! What a staggering waste of resources.
This shows not the dishonesty
This shows not the dishonesty of solicitors, but the sheer incompetence of the LSC. Quite simply, it was up to the LSC to ensure that the errors made by solicititors were picked up and the money not paid out in the first place! It suits the LSC to blame solicitors because it then means they deflect the attention from themselves. Following last years visit from the NAO, the LSC supposedly tightened up its procedures, yet this has resulted in an even bigger overpayment. How does the LSC explain this? Bill Callaghan's comment that: 'A small minority continue to over- or mis-claim for the work they do.' Seventy seven million pounds - a small minority? Who are you kidding!
be careful what you wish for!
the m.o.j already has the solution.
the l.s.c, or whichever public body replaces it, will contract with fewer and larger firms which they hope to audit more effectively and more cheaply.
t
solution to what?
you're right Tony but the solution to what problem? The terrible problem of solicitors being paid for work done? Oops, I mean overpaid. Paid anything at all, no matter how complex the job, means overpaid it seems.
anon x2 :-)...... solution= a
anon x2 :-)...... solution= a (fewer) box ticking exercise!
This highlights the rampant
This highlights the rampant abuse of the legal aid system which brought about the (long-overdue)cuts in the legal aid budget.
Anon at 16:32, how does this
Anon at 16:32, how does this highlight the 'rampant abuse of the legal aid system' exactly? Have you not read the other comments? What experiece do you have of working in the legal aid system? It sounds like you just bought, hook, line and sinker, the propaganda mentioned above. Can you explain how a solicitor being accused of overclaiming simply because they helped a legal aid client via one face to face meeting and then by phone and email rather than a second face to face meeting is fair? The solicitor could spend maybe 12 hours or so helping that client to reach an agreement about their children with their ex and avoid going to court, only to get paid only £96 instead of £430 (before large overheads). Where the solicitor has claimed £430, not realising that the small print of the constantly changing rules says they must have had a second 'meeting' with the client (it doesn't actually say face to face), they are told by the LSC that they are have 'overclaimed' and must repay the difference between the £96 level 2 fee and the £430 level 2 fee. Multiply this unwitting error by many solicitors and many firms and you start to get towards the substantial 'overclaim' in the article. but is this rampant abuse? I would say so - by the LSC! Most solicitors would not class a 'meeting' as a face to face these days anyway I suspect, but instead work in terms of 'attendance' time, whether that be face to face, on the phone, skype (face to face meeting??) or email. I would love to see someone judicially challenge the LSC as to the legality of reclaiming these 'overpayments' and on the interpretation of the word 'meeting'. I was taught that in contract law the contra preferentum rule meant that any ambiguous term would be construed in favour of the party who would otherwise be prejudiced.
Anonymous on Sat, 04/12/2010
Anonymous on Sat, 04/12/2010
Anonymous, this is not 'rampant abuse,' but a failure by the LSC to properly control the purse strings to ensure that solicitors are paid only what they are entitled to. If you are looking for someone to blame, perhaps you should be looking there. Perhaps you should also mull over this little nugget. In 2009 the LSC 'overpaid' solicitors 24.7m, in the same year they were also branded as a failing organisation and control handed over to the Ministry of Justice. You would think that after this massive failure, heads would roll. Sadly they did not. The only person who lost their job was Carolyn Regan. Everyone else was kept in their jobs, with the executive directos being given massive bonuses for their stirling efforts - no doubt this years bonuses are even bigger!