CONFUSION: issues arise surrounding general civil contract and police station fixed fees


The year started badly for legal aid lawyers, with the prospect of the general civil contract being terminated and confusion over whether police station fixed fees include VAT.



Following the Court of Appeal's ruling last year that the Legal Services Commission (LSC) was in breach of EU procurement law in relation to the amendment terms of the new unified civil legal aid contract, the LSC has said it will terminate the contract and re-tender for the work if agreement with the Law Society on the way forward and a narrower amendment clause cannot be reached.



Richard Miller, the Society's legal aid manager, said it wants the LSC to comply with the ruling: 'We are advised that they must "nullify the effects" of their breach of procurement law; and that this means the amendment clause falls, as do the fixed and graduated fees brought in under that clause.'



He added: 'The LSC refuses to accept this, but has not explained on what legal basis it claims to be entitled to do so. We are therefore faced with the prospect of further litigation to require the LSC to act lawfully.'



Meanwhile, the LSC has finally confirmed that the fixed fees for police station work set out in the annex to the general criminal specification are inclusive of VAT, while the fees set put in part E of the specification for hourly rates and fixed fees for magistrates' court work are exclusive of VAT.



An LSC spokesman said: 'Our website, training to providers and material prepared for software providers have all been consistent on this point and it was clearly flagged in the policy consultation exercise.'



Rodney Warren, director of the Criminal Law Solicitors Association, said: 'It's a pity the contract doesn't say that. It isn't good enough to say we made a mistake, but you always knew what we intended... We are entitled to assume a common policy would be followed - ie, that all fees were exclusive of VAT.'



Mr Miller said: 'We have instructed our external lawyers, Mills & Reeve, to write to the LSC requiring them, as a matter of contract, to clarify the situation and to remedy their error by remedying the contract... The problem is symptomatic of the LSC setting a rushed timetable that it cannot meet, of producing "cut and paste" contracts that contain major errors such as this and of failing to work collaboratively with the Law Society.'



Meanwhile, the Law Society has submitted a maladministration complaint regarding the LSC's recoupment of payments on account, many of which date back several years, and requested an amnesty on all payments over six years' old, where files will often have been destroyed.



An LSC spokeswoman said it would respond to each allegation when the evidence has been reviewed.



Catherine Baksi