Top legal aid firm avoids closure by HMRC

Top London legal aid firm Duncan Lewis has avoided being shut down by HM Revenue & Customs after falling behind in tax payments because of delayed settlements from the Legal Services Commission.

A petition to wind up Duncan Lewis, last year the highest earning civil legal aid firm in the country, was presented to the High Court by HMRC on 3 April, according to court papers. Registrar Jacques dismissed the petition following a hearing on 20 May.

It is understood that Duncan Lewis suffered cashflow problems because of a shortfall in the money it received from the LSC, which funds legal aid. It is understood that a shortfall of around £3m was reconciled between the firm and the LSC before the 20 May hearing.

Duncan Lewis declined to comment. A spokesman for the solicitor to HMRC said HMRC could not comment on individual cases. An LSC spokesperson said: ‘We work in close partnership with Duncan Lewis & Co – they are one of our biggest suppliers. We were aware of the petition and have had several meetings with the firm to understand the issues concerned. We are continuing to work closely with them to ensure that both their processes and ours ensure timely submission and payment of claims.’

Duncan Lewis earned £6.2m from civil legal aid work in the year ended 31 March 2008.

Duncan Lewis’s head office in Dalston, London, was subjected to a protest organised by the London Coalition Against Poverty last month.