Mental Health Work: practitioners threaten action over changes to funding criteria

Mental health practitioners have threatened the Legal Services Commission (LSC) with judicial review, claiming that they are being put out of business by 'unlawful' and 'retrospectively applied' changes to the funding criteria for Mental Health Review Tribunal work.


The Mental Health Lawyers Association (MHLA), which represents 80% of lawyers acting for clients before the tribunal, instructed Leigh Day & Co to send a letter before action to the commission last week.


In the letter, the association outlined its concerns about a new approach to funding that it says was introduced in March 2006 without proper consultation. The MHLA said certain items of work and disbursements that were previously allowed - including the costs of expert reports and attendance at hospital managers' and other categories of meetings - are now being 'routinely' disallowed when files are audited.


In addition, the MHLA said the LSC's internal guidance and checklists used by auditors when determining whether costs should be allowed had not been provided to its members.


Jamie Beagent, the solicitor at Leigh Day & Co acting for the MHLA, said the different approach was adopted after the LSC set up a single, centralised mental health unit for assessing funding in October 2005. Funding was previously approved by its regional offices.


He said the LSC wrote to suppliers of mental health advice informing them that, from 15 March 2006, any arrangements they had had with regional offices would be treated as having come to an end, and the current contract rules and guidance would apply.


'The letter was accompanied by what was described as a "clarification" of the current rules, but in effect it announced a new, more restricted approach to funding,' Mr Beagent said.


The association's letter to the commission argued that such a retrospective redefinition of funding criteria was contrary to the legitimate expectation held by MHLA members. It also said the failure to approve proper costs meant firms were unable to properly represent clients.


Richard Charlton, the association's chairman, told the Gazette: 'The LSC is forcing us all into bankruptcy or out of work and the losers will be those who are mentally ill and detained and cannot get legal representation. This is not just unfair on us and our clients, but it's irrational too. Part of what we were promised in contracting was certainty, but this is a journey into uncertainty.'


Patrick Reeve, head of Community Legal Service policy, insisted that the commission was applying the existing contract and rules, which have been subject to detailed consultation.


'Any issues can, and should, be resolved without recourse to litigation. Indeed the contract between the commission and suppliers makes clear that, where there are issues arising from cost assessment, the correct avenue is an appeal against the assessment,' he said.