Legal aid recovery in the dock

NEGLIGENCE: Legal Services Commission could face claims over poor recovery of debts

The Legal Services Commission (LSC) could face a rush of negligence actions for failing to recover judgment debts owed to successful claimants, following a first instance decision last week.The county court decision, although not binding on other courts, is thought to be the first time the LSC has been found liable in negligence to those receiving state funding for cases.The case arose following a 1996 judgment awarding claimant Jacqueline Adam 12,046 compensation and costs against her former landlords for building disrepair.

The LSC - then the Legal Aid Board - took over recovery of the sums owed to Ms Adams, as permitted under its regulations.In 1996, the board compromised the action against the landlord, covering its own costs but regaining nothing for Ms Adams who was also bound by the agreement.

According to Ms Adams' solicitor, Ole Hansen of London firm Ole Hansen & Partners, the board settled the action despite his client's representations that one of the landlords had sufficient money to settle the judgment and costs in full.Mr Hansen said that given the 'shambolic' methods of operation disclosed by the board's debt recovery unit in the case, he would be surprised if there were not more cases.

'We are talking about operational rather than policy functions, but clearly this could affect many cases dealt with by the LSC,' he said.

An LSC spokeswoman said: 'The Commission does not accept that this county court decision represents a landmark case.

Indeed, it is contrary to the leading authorities from the High Court, the Court of Appeal and the House of Lords.

The judge, recognising the complicated nature of this case, has given the Commission permission to appeal his decision.

The commission will definitely be appealing.' Mr Hansen welcomed the news of an appeal, saying it would be useful if the Court of Appeal established the case as a binding precedent.Meanwhile, the 1999/2000 Legal Aid Board annual report published last week showed that 1,661.5 million was paid out in assistance, administration costs and VAT last year, a decrease of 4% on 1998/99.

Sue Allen