Legal aid rules 'defective'

COSTS: judge calls for regulations to be rewritten as firm keeps fees despite rules breach

The High Court has ruled against the Legal Services Commission (LSC) after it paid a firm for a case and then clawed the money back following a breach of regulations - and has called on the government to look again at how the legal aid laws are drafted.

London-based Oliver Fisher brought a judicial review after the LSC deducted 16,000 from sums owing on another case when it discovered that a statutory charge had arisen on a former client's property.

The LSC argued that it was too late to register an interest as the house was being sold, and concluded that it had a power under the Civil Legal Aid (General) Regulations 1989 to defer payment of the money it lost.

Although he found that the firm breached the regulations by not informing the LSC about the property quickly enough, Mr Justice Scott Baker ruled that 'once money has been paid properly, that is the end of the matter', explaining that the LSC was not allowed to recoup a payment made earlier by reallocating the money to another case.

He called for the 'defective' regulations to be rewritten so that solicitors would have a duty to repay costs received in a case where they have breached the regulations and the LSC has suffered a loss.

Oliver Fisher partner Russell Conway suggested that it is standard procedure for solicitors to inform the LSC of property interests when cases are concluded, as the firm did in this case, and said the procedures for collecting costs in legally aided work are 'costly, tortuous and labyrinthine'.

An LSC spokesman said the ruling made it clear that solicitors have a duty to inform where the statutory charge arises.

'The LSC does not propose to appeal.

However, we are in discussions with the Lord Chancellor's Department as to whether the regulations should be amended to give us greater powers to protect the fund, as Mr Justice Scott Baker suggested,' he said.

'Until this issue is resolved, we will not defer payment in these circumstances in other cases.'

Paula Rohan