The Legal Services Commission (LSC) has clawed back more than £7 million in fees paid to civil legal aid law firms that have fallen into the worst audit category, according to the latest figures released in Parliament.

Legal aid minister David Lammy said more than 700 suppliers had been ordered to pay out because they fell into audit 'category 3', where the LSC watchdogs assessed them as over-claiming by more than 20%. Mr Lammy said the firms were told to pay up as the result of an 'objective audit where the LSC compares what is claimed by suppliers against what is actually evidenced in those files'.



Mr Lammy's comments came weeks after the auditing system received a slating from the constitutional affairs select committee for 'punishing' honest and competent solicitors (see [2004] Gazette, 22 July, 1).



Richard Miller, director of the Legal Aid Practitioners Group, argued that audit findings rarely related to firms claiming for work not done. 'Unfortunately, the answer given by the minister wrongly implies that such is the case,' he said. 'Nor does the minister make reference to the extremely poor quality of the audits, as found by the constitutional affairs select committee, which has resulted in many of the best known and trusted firms wrongly being accused of overcharging.'


Mr Lammy also told MPs that the LSC had recovered £28 million worth of debt owed under the statutory charge scheme in 2003/04. The total debt was worth £262 million. 'Much of this debt - around 72% - is secured by the registration of a statutory charge against property and is not, generally, immediately collectable,' Mr Lammy explained.