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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