LSC Costs Recovery Action Success

The Legal Services Commission has successfully obtained judgment on the rights to recover payments on account made under the Legal Aid Act 1988 – LSC v Loomba and others [2012] EWHC 29 (QB), Cranston J.

The case involved three claims listed together as test cases. All three claims concerned moneys which the LSC asserted were owing to it by solicitors as a result of legal aid payments to them on account of work being undertaken for clients in civil cases. The Commission contended that the claims were authorised by law. Since it concedes that there were no express legislative power to make the claims, its argument raised some difficult issues of statutory interpretation. If the claims cannot be legislatively justified the Commissions advanced other legal bases for them, including restitution. The defendants contended that there was no legislative authorisation for the Commission’s actions, and in any event the claims are defeated by various defences. They also submitted that the Commission’s claims fail for public law reasons including the unfairness with which they have been pursued.

Judgment was entitled to recoup the payments on account in the manner it has pursuant to the incidental power in section 4(1) (b) of the 1988 Act.

This case highlights the need for lawyers reporting properly to the LSC, particularly when winding up a practice, and involving costs experts to prepare the appropriate bills of costs and claim forms to ensure costs are accounted for.

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New Bill Format

Proposals are underway to revamp the much maligned Bill of Costs. Whilst not an accusation leveled at our often praised bills, it is often the case that there is a distinct absence of detail within bills and Lord Jackson has claimed that the production of bills of costs should be reduced to the push of a button, thus generating pristine bills full of detail that are readily viewable, adaptable and alterable so all parties can change them to see varying outcomes. This will ultimately lead to reduced time preparing the bills and reduced time adding up the bills following a detailed assessment.

Noble aspirations.

At CLC, we are already able to do both the readily amendable and instant calculations as proven at a recent detailed assessment where half a million pounds worth of costs across a number of bills were ready by the time the Judge had made his order. But this misses a trick. The fact that the Costs Lawyer has taken the time to read the file and prepare the bill knowing what he can and cannot reasonably expect to recover is removed by Jackson’s proposals, and in addition, time spent preparing and considering is increased to reflect the fact the Costs Lawyer is less familiar with the case.

As such, it is highly debatable whether what Jackson aims to achieve will be achieved.