Civil-assessed costs claims: inhouse and in trouble

In June 2020, the Ministry of Justice (MoJ) and the Legal Aid Agency (LAA) unexpectedly decided to transfer civil-assessed costs claims worth between £2,500 and £25,000 from the courts to its inhouse team.

There was consultation on amendments to the cost assessment guidance, but not on the decision itself. The LAA said the change would mean faster payments in both the long and short term, given the lockdown had left many providers without payment for cases because of court closures.

Every practitioner wants to be paid faster, of course; but trust between the LAA and the profession is not at its highest. This sudden move provoked significant objections from solicitors, barristers and costs lawyers, so much so that the Law Society began judicial review proceedings over the lack of consultation.

In settling the case in February, the MoJ agreed to give providers a choice between court and LAA assessments while a proper consultation was carried out.

The responses to the consultation are now being considered and I have not seen much support for the proposed system.

For one thing, we have our doubts about how genuine a consultation this is, as it falls foul of the government’s own consultation guidelines in several respects.

For example, it presents no alternatives. It is hard not to conclude that the LAA has already reached a decision and is just going through the motions, notwithstanding the terms of the settlement.

Government guidelines clearly state consultations should take place when plans are at a formative stage and not ask questions about issues on which a final view has already been reached.

The consultation also lacked substance in significant areas, such as having no formal costs/benefit analysis or outlining how much the switch would cost the LAA.

The lack of neutrality is a grave concern. How can the LAA both pay the bills and take on the task of assessing what a reasonable figure for them is, not least when it has internal targets on both processing and expenditure?

The appeals process is meant to be a safeguard, but is it? The independent costs assessor who adjudicates on appeals is chosen and paid by the LAA, which also provides all the material and communications.

Appeal bundles are not agreed and although the provider is supposed to be notified and given copies of further representations made by the LAA to the adjudicator and be given a right to reply, this does not always happen.

Adjudicators’ decisions are not even always sent to the provider but paraphrased by the LAA. The whole process severely lacks oversight and transparency.

How will the LAA resource handling what, in the last financial year, were 21,000 court-assessed claims? And in practice, how will they do it when the bill reports produced by its client and costs management system are inadequate to enable a case worker to effectively assess quantum?

These staff have no legal experience to draw on when undertaking their assessments of complex legal processes, where often an understanding of what happens in practice is a major benefit to an assessor.

Our experience is that there has always been a noticeable difference between assessments carried out by the LAA and the courts, where LAA caseworkers frequently disallow items that are reasonable and proportionate.

This is all likely to lead to an increased number of appeals, the cost of which providers have to absorb and which would also hit the LAA’s resources.

Ultimately, what the LAA is proposing appears a far inferior system that, because of the problems it will cause, will not save anything.

This is not just a question of better administration. If solicitors fail to cover their costs of providing legal aid services at properly remunerated rates, they will cease undertaking such work.

Of course, some providers will be happy to use the LAA and so both the Law Society and the Bar Council have recommended continuing to offer the choice, to give the LAA time to prove it can handle these assessments.

The LAA often talks about working with the profession. This is the time to prove they are not empty words.

Bob Baker is co-chair of the Association of Costs Lawyers’ Legal Aid Group associationofcostslawyers.co.uk