Court of Appeal backs ban on LSC funding embargoes

Decision: Commission was wrong to abandon litigant

The Legal Services Commission (LSC) has failed in an attempt to appeal against a finding that it may not place embargos on its funding.In an action last summer (see [2001] Gazette, 9 August, 5), the High Court determined that the LSC could not use such embargos.

It followed a case in which a law graduate settled a personal injury claim for 15,000 after rejecting two offers of 10,000 against his solicitors' and counsel's advice.

After he rejected the offers, the LSC withdrew funding just before trial.The original finding said the LSC was entitled to stop funding, but could not do so with an embargo before discharge of the certificate.The LSC's appeal was rejected late last month.

Lords Justice Sedley and Waller found that the LSC had no power to impose such an embargo.Lord Justice Sedley said: 'The reality is an embargo imposed on the eve of trial leaves an assisted claimant high and dry.'Lord Justice Simon Brown dissented, saying that such a power did exist, but found the power had been used unfairly in this case.A spokesman said the LSC was 'surprised and disappointed' by the decision, while pointing out that it only applies to pre-April 2000 certificates.

'This decision makes it harder for us to protect the interests of the taxpayer when legal aid has to be withdrawn just before a trial,' he said.'We do not rule out an appeal and are discussing with the Lord Chancellor's Department whether urgent regulation changes should be made.'Jeremy Fleming