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Legal aid overpayments to solicitors 'worth 77m'

1 December 2010

The LSC made overpayments of 77m to legal aid lawyers in the financial year April 2009-10, the National Audit Office has estimated.

Although it was expected that Amyas Morse, the Comptroller and Auditor General, would qualify the accounts, the latest figure is three times the £24.7m that the NAO estimated had been overpaid to legal aid solicitors in the previous year.

Carolyn Downs, chief executive of the LSC, warned of a rise in overpayments earlier this month at a conference in London (see solicitorsjournal.com, 8 November 2010).

The NAO said £32.9m of the payments were made to lawyers who could not demonstrate their clients’ eligibility, while the remaining £43.6m resulted from providers charging too much.

The highest level of errors related to claims from family or immigration lawyers, the NAO said, with 35 per cent of claims incorrect or not fully supported.

The NAO also found the LSC had overcharged clients an estimated £2.1m.

Steve Hynes, director of the Legal Action Group, said firms often found it difficult to repay money to the LSC because of the commission’s accounting system. “The system is all over the place, with 30 different ways of recording expenditure.”

Hynes said he did not think the rise in overpayments was the result of greed or legal aid lawyers abusing the system.

“It’s very difficult to get proof of means of people when their lives are chaotic,” he said.

Hynes added that the NAO’s audit represented a snap shot of a small number of firms.

Sir Bill Callaghan, chairman of the LSC, said the NAO report mentioned that civil legal aid acts of assistance had increased by nine per cent from 1.43m to 1.5m.

“Most providers do an excellent job in delivering legal aid and managing their business; however, a small minority continue to over or misclaim for the work they do,” he said. “This impacts the legal aid budget significantly each year and can’t be tolerated.”

Callaghan said the LSC would continue to focus on strengthening its financial management through its internal financial stewardship programme.

He added that there had been a significant rise in contract notices and terminations since April this year. Callaghan said 495 contract notices had been issued this year, compared to 259 in the financial year 2009-2010, while there had been 90 contract terminations, compared to 13 in the financial year 2009-10.

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Legal Aid Procedures