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5.126Civil Legal Aid Representation Certificates are funded on an hourly rate basis. See chapter 13 for more information.
5.127In almost every case, a funding certificate is only granted subject to two limitations:
•a particular step in the proceedings, such as ‘all steps up to the filing of a defence and thereafter obtaining counsel’s opinion’, or ‘all steps up to a case management conference’; and
•a costs limitation. Costs limitations include profit costs (and any enhancement or uplift), counsels’ fees and disbursements, but not VAT.
5.128Standard costs limits vary by category:
•actions against the police etc – £6,000;
•community care – £3,500;
•immigration and asylum – £4,500;
•mental health – £5,000;
•special Children Act cases – £9,000;
•all other categories, and judicial review cases in the above categories – £2,250.
The above limits are the standard defaults but it is open to you to apply for a larger initial limit where justified.
5.129It is extremely important not to do work outside the scope of either limitation as you will not be paid for it. It is particularly easy to lose track of counsels’ fees and disbursements, and it really helps to keep all documents relating to financial issues together in the file. One of the advantages of CCMS is that you can log on and see claims made by counsel under your certificate, helping to keep track of costs.
5.130Limitations can be amended on application to the LAA or under delegated functions (previously called devolved powers under the AJA 1999) in urgent circumstances (see below for more information about delegated functions).
Amendments to scope and costs
5.131Requests for amendments to either scope or costs limitations are made to the LAA via CCMS. In making a request, the adviser will be obliged to demonstrate that the case continues to satisfy both limitations of the merits test, and state what new scope or costs limitation is required. Therefore, there must be merit not only in the case as a whole, but in each step of the proceedings.
5.132Timing the application for an amendment has to be done with care, as the date an amendment takes effect is the date of the decision. If you leave your application until the last minute, you risk exceeding the current limitation and not being paid. On the other hand, you must justify why the work needs to be done at the particular time, as the LAA will refuse any amendment considered to be premature. It will also refuse an amendment that might become redundant due to some other event taking place.
Use of counsel and amendments for a QC
5.133A Representation certificate allows you to instruct one counsel; but if the case warrants second counsel or a QC, you must apply to the LAA for authority. In general, authority will only be granted in cases of exceptional complexity or importance, and you must be able to show that the interests of the client cannot properly be represented without the authority being granted. There is no automatic presumption that a QC will be granted for an appeal to the Court of Appeal, nor that where another party has a QC or more than one counsel that it will be justified for a legally aided party to have the same level of representation. See the LAA’s prior authority guidance for more information.
1Available at www.gov.uk/government/uploads/system/uploads/attachment_data/file/543186/legal-aid-narrative-guidance.pdf/. Failure to obtain authority will mean that no payment can be made for the second counsel or QC. See also chapter 15.
Disbursements and prior authority
5.134In many cases, disbursements can be large, and there is a risk to the organisation that they will not be allowed, or allowed in full, on assessment of the bill.
5.135Therefore, the prior authority scheme allows you to apply to the LAA for authority to incur a disbursement in advance, if it is above £100 and is not an expert fee covered by the standard rates/hours introduced from 3 October 2011 and reduced from 2 December 2013.
2Community Legal Service (Funding) (Amendment) (No 2) Order 2011 (for AJA 1999 cases) and Civil Legal Aid (Remuneration) (Amendment) Regulations 2013 Schedule 2 (for LASPO cases). Expert fees were reduced by 20% on 2 December 2013 and so the rates in Schedule 5 of the 2013 Remuneration Regulations are no longer valid for cases started after that date. The application is made via CCMS accompanied by a quote for the disbursement and reasons why it is necessary. The advantage of having authority is that no question as to the validity of the disbursement can be raised on assessment of the bill, unless and to the extent that it exceeds the amount or scope of the authority. Prior authority therefore gives a measure of costs protection for expensive disbursements.
5.136You may apply for prior authority if:
3Standard Civil Contract Specification 2013 para 5.11 or 2010 Specification para 5.25.a)an item of costs is either unusual in its nature or is unusually large;
b)you wish to instruct a QC;
c)prior authority is required under the specification; or
d)you wish to instruct an expert at higher rates than are set out in the Civil Legal Aid (Remuneration) (Amendment) Regulations 2013.
If you do not apply for prior authority and b), c), or d) above applies, you will not be paid in full or at all for the fees incurred.
Experts’ fees
5.137Experts’ fees have been codified since October 2011. The Civil Legal Aid (Remuneration) Regulations 2013 set out applicable rates for experts in different areas of expertise. The fees were reduced by 20 per cent by the Civil Legal Aid (Remuneration) (Amendment) Regulations 2013. In some cases, there are fixed fees for reports, in others hourly rates. The hourly rates are a maximum, not a fixed rate.
4The full list of rates can be found in Civil Legal Aid (Remuneration) Regulations 2013 Sch 5 for cases started before 2 December 2013 and in Civil Legal Aid (Remuneration) (Amendment) Regulations 2013 Sch 2 for cases started after that date. The LAA has issued some useful guidance on experts’ fees.
5Guidance on the Remuneration of Expert Witnesses: www.gov.uk/expert-witnesses-in-legal-aid-cases.5.138There are ‘London’ and ‘non-London’ rates; which applies is determined by the location of the expert. Where an expert has offices both in and outside London, it is the location of the solicitor that determines the rate.
6Costs Assessment Guidance para 3.46.5.139The rates cannot be exceeded unless the LAA has granted prior authority in advance. Prior authority will only be granted in exceptional circumstances, defined as being where:
7Standard Civil Contract Specification 2013 para 6.61 or 2010 Specification para 6.62.•the expert’s evidence is key to the client’s case and either:
•the complexity of the material is such that an expert with a high level of seniority is required; or
•the material is of such a specialised and unusual nature that only very few experts are available to provide the necessary evidence.
5.140Applications for prior authority in certificate cases should be made via CCMS. Prior authority cannot be granted in Legal Help cases, and so where you instruct an expert at a higher rate in a Legal Help case you should justify on the file why you have done so. It would be unusual – and risky – to do this in a Legal Help case.
5.141Where a particular type of expert is not specified in the Remuneration Regulations and therefore there are no codified rates, the LAA will assess rates on a case-by-case basis, but will ‘have regard to’ the codified rates.
5.142Where either enhanced or non-codified rates are sought, the LAA will expect to see at least two written quotes setting out the hourly rate, number of hours and total fee.
5.143Where joint experts are instructed and all instructing parties are legally aided, the codified rates apply to the total instruction, not each party’s share. Any application for prior authority need only be made by the lead solicitor in the instruction.
5.144Where joint experts are instructed by both legally aided and non-legally aided parties, the LAA will take a pro rata approach. Where fixed fees are specified, the LAA will pay a share of the fee. Where an hourly rate is specified, the LAA will determine their share on the basis of hours rather than rates. They will pay – in a two party case – half the time at the codified rate.
8Costs Assessment Guidance para 3.41.5.145For example, a surveyor is instructed jointly on behalf of a tenant and a landlord. If he takes six hours to do his report, the LAA will pay for three hours, up to the maximum of £115 per hour (in London) – so £345. They will not pay six hours at £115 (£690) where the landlord also agrees to pay six hours at £115 – the approach is that the codified rate is the maximum the expert can charge to the fund and in a joint instruction the LAA will pay half the time taken to prepare the report. The other party can agree to pay the expert more, but that is a matter between them and the expert.
5.146As a result of these changes, the LAA now require disbursement vouchers with a breakdown of time spent and hourly rates charged to accompany claims, even those assessed by the court. If the court has assessed an hourly rate higher than the codified rates without prior authority, the LAA will reject it and it will have to go back to the court for re-assessment.
9See the court-assessed claim checklist at www.gov.uk/government/publications/civ-claim1-civil-claim-form-not-fixed-fee. Other restrictions on experts’ fees include:
•capping travel time to £40 per hour and costs to 45p per mile;
•ban on claiming for administration costs;
•must not claim a cancellation fee unless given less than 72 hours’ notice of the cancellation;
•requiring experts to time record and itemise time spent on their invoices.
5.147The codified rates also apply to attendance at court. Some experts have been in the habit of charging for half or full days for court attendance; now they must charge the hourly rate.
Funding from the client’s point of view
Contributions
5.148Clients on passporting benefits or with very limited means do not have to make contributions to the cost of their case during its lifetime; but they may need to make payment at the end of their case if money or property is recovered or preserved, under the statutory charge (see below at 5.154 onwards for more information). It is therefore easy for such clients to be lulled into feeling that their legal aid is going to be free, when it is not, and so it is even more important to ensure they understand the effect of the statutory charge and are given a costs estimate which is revised at every relevant point throughout the case.
5.149If the client’s capital is between the lower and upper thresholds, the client is required to pay a contribution. The amount of the contribution is the lower of (a) the amount by which capital exceeds the lower threshold and (b) the total estimated costs of the case.
5.150If the client’s disposable income is between the lower and upper threshold, a contribution will be payable. The amount of the contribution depends on the amount by which income is above the lower threshold, but is a fixed sum plus a percentage of the excess each month for the life of the certificate. The eligibility calculator on the LAA website will show you the level of contribution the client will have to pay.
5.151If the client fails to pay a contribution, you will receive notification from the LAA, and although you do not have to stop work, you are at risk that legal aid will be withdrawn from the date of the notice
10See the Civil Legal Aid (Procedure) Regulations 2012 reg 43. if the client does not make payment.
5.152Should the amount paid in contributions exceed the final costs as assessed, the client will be entitled to a refund of the difference.
Changes in circumstances
5.153Clients must be financially eligible on both capital and income. They must inform the LAA of any change in their means. A reassessment will then be carried out.
Statutory charge
5.154The charge is governed by section 25 LASPO and the Civil Legal Aid (Statutory Charge) Regulations 2013. The statutory charge under certificates operates at all levels of service, and across all categories except family mediation. It operates on both property recovered and property preserved.
11LASPO s25.5.155If a matter is funded by Legal Help
only, the charge does not arise in any category.
12Civil Legal Aid (Statutory Charge) Regulations 2013 reg 4(1).5.156If a case is funded initially under Legal Help, Help with Mediation or Family Help (Lower) and goes on to a certificate, if the charge arises, it also applies to those costs.
13Reg 4(2).5.157If money or property is at issue in the proceedings, then the successful client is at risk of the charge. A claimant client whose claim succeeds recovers property; a defendant client who resists a claim preserves property.
14Hanlon v Law Society [1980] 2 All ER 199. Even if title to the property is not in issue, but possession of it is, the charge still arises.
15Parkes v Legal Aid Board [1994] 2 FLR 850.5.158Where the proceedings result in recovery or preservation for someone other than the client, the charge arises.
16LASPO s25(1)(a).5.159The charge gives the LAA first call on any money or property recovered in the proceedings. It is used to repay the costs of funding the case. You should note that even though damages in disrepair cases are out of scope under LASPO, the LAA takes the view that if the client has had the benefit of legal aid to enforce repairs, the statutory charge applies to the whole of the proceedings (see chapter 11 for more information). So, if a claimant in a housing disrepair case wins compensation of £5,000, and costs under the certificate and Legal Help were £1,500, then (assuming no costs were awarded from the other side) the charge would operate and the client would receive only £3,500 (recovery). On the other hand, if the client was defending a claim for a £5,000 share in property and won the case, if the costs were £1,500, he or she would be liable to pay £1,500 (preservation).
5.160All monies due to a client in legal proceedings must be paid to his or her solicitor if the client is legally aided in any way.
17Civil Legal Aid (Statutory Charge) Regulations 2013 reg 13.5.161All property is caught by the charge, unless exempt by regulation. Exempt property is currently limited to:
•periodical payments of maintenance;
•sums paid under:
•Matrimonial Causes Act 1973 ss25B or 25C,
•Inheritance (Provision for Family and Dependants) Act 1975 s5,
•Family Law Act 1996 Part 4,
•Civil Partnership Act 2004 Sch 5 paras 25(2) or 26;
•interim payments in Inheritance Act proceedings;
•the first 50 per cent of a redundancy award;
•the client’s clothes, household furniture or tools of the trade (except in exceptional circumstances);
•state benefits and pensions, and any other property subject to a statutory prohibition on assignment.
18Reg 5. 5.162Damages recovered from the state for breach of the claimant’s human rights are not exempt and caught by the operation of the charge in the same way as all other damages.
19R (Faulkner) v Director of Legal Aid Casework [2016] EWHC 717 (Admin).5.163The amount of the charge is calculated to compensate the LAA for funding the case, and is therefore the amount of costs as assessed (less any contribution paid by the client), less costs recovered from the other side. Therefore, the amount is the net amount paid to the supplier by the LAA.
5.164If the charge arises, the client will have a financial interest in the organisation’s bill of costs. Clients should be advised of the potential effect of the charge at the outset of the case, given regular costs updates, and at the end of the case be given a copy of the bill and advised of their right to make representations on the bill, including at any assessment hearing. The only elements of the bill that do not form part of the charge are the costs of assessment and costs of complying with Equality Act 2010 obligations to clients with disabilities
20Civil Legal Aid (Statutory Charge) Regulations 2013 reg 6. as well as any settlement fees in family cases.
21Reg 4(4).Recovery of money
5.165Regulation 3 provides that all monies owing to a funded client should be paid to his or her solicitor, not to the client direct. The only exceptions are periodic payments of maintenance, and money paid into court to be invested for the client’s benefit in the limited circumstances set out in reg 11. Regulation 15(1)(a) obliges the solicitor to report any recovery or preservation to the LAA straight away.
5.166Once money is received, the solicitor may make a judgment as to whether it is exempt property. If it is, it may be paid to the client. If not, it must be paid to the LAA. In cases of doubt, the best course is to pay to the LAA, which can refund the client. If the solicitor fails to protect the LAA’s charge and pays the money to the client without deducting it, the solicitor is liable.
22Standard Contract Standard Terms 2013 clause 14.12; 2013 Specification para 5.20.5.167Regulation 15(3) entitles the solicitor to apply to the Regional Director for permission to pay to the client money which is not required to satisfy the charge – for example, if £10,000 is recovered and costs will not exceed £5,000, an application can be made to return the extra £5,000 to the client.
5.168Unless an application to defer the charge is being made (see below), the solicitor should send a cheque for the value of the money recovered with the final bill to the LAA. The LAA will assess the bill, pay solicitor and counsel, and return the balance to the client.
Recovery of property, and preservation cases
5.169In such cases, money is unlikely to be paid to the solicitor. Instead, the solicitor will report recovery or preservation to the LAA. The LAA will pay the costs of solicitor and counsel, and pursue the client for the costs.
Enforcement of the charge – the LAA’s powers
5.170The LAA has no power to waive the charge altogether, except in very limited circumstances (basically, where it was recognised as a wider public interest case from the start and the LAA funded this client but not others to act as a test case: reg 9). See also para 5.183.
5.171In certain circumstances, enforcement of the charge can be postponed under reg 22. The conditions are:
•the property is the client’s (or his or her dependant’s) family home; or in family cases, money to be used to purchase a home for the client or dependants; and
•the LAA is satisfied that the home will provide sufficient security for the charge; and
•it would be unreasonable for the client to repay the charge.
5.172If the charge is postponed, simple interest at 8 per cent per annum will accrue from the date of registration. Interest is due on the lower of the value of the charge or the value of the home (reg 25). The charge must be registered at the Land Registry or equivalent steps taken.
23Civil Legal Aid (Statutory Charge) Regulations 2013 reg 22(2).5.173Otherwise, the charge is payable immediately unless the LAA agrees to accept payment by instalment, and the LAA can enforce the charge, if necessary, by enforcement proceedings in the courts.
5.174The solicitor should report to the LAA using the appropriate ADMIN form.
Related proceedings
5.175The LAA take the view that the statutory charge applies to the whole of proceedings, whether or not it funds the whole case. LASPO s25 says that the charge arises on ‘any property recovered or preserved by the individual in proceedings, or in any compromise or settlement of a dispute, in connection with which the services were provided’.
5.176There are two particular areas where practitioners have encountered difficulty; housing disrepair, and Human Rights Act (HRA) 1998 claims made by children and parents within care and wardship proceedings.
5.177Disrepair claims (the position is different for counter-claims; see chapter 11) are only in scope to the extent that an injunction or claim for specific performance is sought to enforce repairs to a defect that carries a significant risk of harm. Any related damages claim – even if made within the same proceedings – is out of scope and work done in relation to the damages must not be claimed for on the certificate. But the LAA will recover the costs of the funded part of the claim – the remedy of the defect – as part of the statutory charge where damages are recovered in the non-funded part. Even though that part of the proceedings was unfunded, the damages were recovered within the proceedings or in settlement of a dispute in connection with which services were provided.
5.178The effect has been that in any case where damages are more than purely nominal, practitioners bring the entire claim under a conditional fee agreement where practicable to do so.
5.179There have been a number of cases relating to the welfare and protection of children, including care and wardship proceedings, where a local authority has fallen short in its obligations to the child or parents or both. This has increased recently through judicial displeasure at increased use of – and duration of use of – Children Act 1989 s20 rather than bringing care proceedings. This has led to claims for damages under HRA 1998 – which, where there are ongoing proceedings in the family court, should generally be brought within those proceedings rather than as stand-alone damages claims.
24See Re L (Care Proceedings: Human Rights Claims) [2003] EWHC 665 (Fam). This creates a problem with the statutory charge, since the general position in care proceedings is no order for costs,
25Re S (A Child) [2015] UKSC 20. with the costs of the care proceedings coming out of legal aid rather than being awarded against the local authority. The effect is that any damages awarded to the child or parents for breach of their human rights will be swallowed up in paying the costs of the care proceedings through the statutory charge.
5.180There are possible ways of dealing with this, but none are entirely satisfactory. One is to require the local authority to pay the costs of the whole care proceedings, not just the HRA 1998 claim, so that there is no claim on the fund and nothing to be recouped through the statutory charge. This has happened in both settlement agreements and in judgments at circuit judge level,
26See for example Re BB (A Child) [2016] EWFC B53. but requires negotiation of both the
Re S (A Child) principles and LASPO s30 – which states that the fact that one party is legally aided cannot affect the liabilities of other parties or the usual principles on which a court exercises its discretion. There are also policy objections to requiring one hard pressed budget (local authority funds) to subsidise another (legal aid).
5.181Another option is to achieve the same end by increasing the damages to cover the amount of costs, rather than award costs. However, although this deals with the Re S (A Child) objection, it still comes up against LASPO s30 and the ordinary principles of the quantum of damages.
5.182An application to the LAA to waive the statutory charge is a third option, but will generally be doomed to failure. The only power to waive the charge is contained in regulation 9 of the statutory charge regulations. That power is only exercisable when an application for waiver is made at the same time as the application for funding and is made on the basis that the funded proceedings have a wider public interest for which this case acts as a test case. It would be very unusual for an HRA 1998 claim within care proceedings to meet the second part of the test, and even more unusual for that to have been anticipated and a waiver applied for when funding was first applied for – especially in the many care cases where emergency funding is issued via delegated functions. Even where a separate legal aid certificate is issued for the HRA 1998 claim – as current LAA practice requires – LASPO s25 will still bite as it covers the proceedings not the funding.
5.183In
P v A Local Authority,
27[2016] EWHC 2779 (Fam). Keehan J (having heard from counsel representing the Lord Chancellor and LAA) considered the principles applying to the statutory charge and the judgment is worth reading for that discussion. The judge found that regulation 5 was very limited in scope and so there was no power to waive the charge. But he concluded that the statutory charge did not apply to the costs for which funding was granted and so would not eat into the HRA 1998 damages. This was because the substantive case – wardship – had concluded by the time the local authority’s act which gave rise to the damages claim arose. So the damages claim was brought as a free-standing claim and (because it misunderstood the nature of the claim) legal aid for that claim was refused by the LAA. So there was no recovery in proceedings in connection with funded services. As a result, LASPO s25 did not apply to the damages and the LAA had no claim on them.
5.184This is an interesting and useful judgment but probably confined to its (relatively unusual) facts. The wider situation has not been – and probably cannot be – resolved by the courts. There are competing policy considerations and competing injustices and ultimately a policy decision will need to be made. If it is not considered right that a child or young person should receive no benefit from damages awarded because of a failure of the state’s obligation to protect him or her, an amendment to the statutory charge scheme will be required. The most straightforward way of doing so would seem to be adding such damages to the list of exempt recoveries found in regulation 5.
Ending a case
5.185Legal aid certificates come to an end in one of three ways: being discharged or revoked, or when a final bill is submitted at the end of the case.
Discharge
5.186When the LAA decides that a certificate should not continue because changing circumstances indicate that funding is no longer justified on the merits, or because the client is no longer financially eligible, the certificate will be discharged. The effect of this is that the client is no longer in receipt of legal aid. If discharge is at the instigation of the LAA, there is a right to appeal to an independent adjudicator. Once the certificate is discharged, the case is at an end and the file can be billed. At the end of a case, the adviser should usually apply for the certificate to be discharged.
Revocation
5.187The effect of revocation
28Civil Legal Aid (Procedure) Regulations 2012 reg 42(2). is not simply to end the funding of a case – revocation retrospectively removes funding from the client, so that he or she never had a valid legal aid certificate at all. The LAA will only revoke a certificate when information comes to light to suggest that it should never have been issued, for example because a client concealed information about his or her resources because the client was never in fact eligible. The effect of revocation is that the client becomes liable for all costs incurred under the certificate.
Submission of final bill
5.188See chapter 13.