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Payments on account
13.11The Standard Contract
1Standard Contract 2010 Specification (civil); Standard Contract 2013 Specification (family) para 6.24; Standard Contract 2013 Specification para 6.22. allows you to claim on account profit costs incurred not earlier than three months after the issue of a legal aid representation certificate. Thereafter, you can apply for further payments on account, provided that you make no more than two applications in any 12-month period. On non-CCMS cases, use form CIVPOA1, which can be submitted as an eform via the LAA CWA online portal.
2www.gov.uk/guidance/legal-aid-eforms/.13.12Cases where the certificate was applied for through CCMS have to be claimed through CCMS. To claim profit costs POAs on CCMS, you need to submit a copy of the ledger, ie full details of the case running costs incurred to date (unless the case is covered by a standard fee scheme and has not escaped the fee). CCMS sends a notification request for you to upload a copy of the ledger shortly after you have submitted the bill. The system then calculates 75 per cent of the costs and a caseworker (not CCMS) will check the POA value against the supporting evidence. You will be paid the amount to bring the total payments on account made to 75 per cent of your profit costs to date. At the end of the case, when you submit your final bill, the LAA will reconcile the payments you have received on account against the final amount assessed and you will be paid the balance. However, there have been disputes between the LAA and its predecessor bodies regarding old payments on account and whether final bills were ever received or paid. See ‘Recoupment and limitation’ below.
13.13See below for information about payments on account under the family law fee schemes.
Prior authority and payment on account for disbursements
13.14You can apply to the LAA for authority to incur a disbursement in advance, if it is above £100 and is not covered by the standard rates/hours for experts introduced from 3 October 2011.
3Community Legal Service (Funding) (Amendment) (No 2) Order 2011, now in the Civil Legal Aid (Remuneration) (Amendment) Regulations 2013. The LAA has set out guidance for the number of hours it considers reasonable for different types of expert reports, and will only consider a prior authority application if it is for more hours than in the guidance, or of a type not included.
4See Guidance on the Remuneration of Expert Witnesses: www.gov.uk/government/uploads/system/uploads/attachment_data/file/420106/expert-witnesses-fees-guidance.pdf. The application must include a quote for the disbursement and set out the reasons why it is necessary. The application is made via CCMS or using form CIVAPP8A if it is a pre-CCMS case.
13.15You may apply for prior authority if:
5Standard Civil Contract Specification 2013 para 5.11.a)an item of costs is either unusual in its nature or is unusually large – this means that it is outside the guidance referred to above;
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 Remuneration Regulations.
If you do not apply for prior authority and b), c), or d) above applies, you may not be paid in full or at all for the fees incurred.
13.16Payments on account of disbursements can be claimed at any time, subject to disbursements being individually or cumulatively above £100. The form is the CIVPOA1, as for profit costs above. It can be submitted as a paper form, or as an e-form, using the legal aid online facility. The latter is recommended, not least because payment is made more quickly. See
www.gov.uk/legal-aid-eforms. In CCMS cases claims are made via CCMS. An invoice showing the hourly rate and number of hours claimed must accompany a claim for expert fees.
Assessment of the final bill
13.17Once a case has concluded, the final bill should be submitted to the court or LAA for assessment, as appropriate (see below). It should be noted that both the LAA and the court require authority to assess the bill. The authority to assess is either a discharged certificate, or a final order requiring costs to be assessed. Therefore, if the final order makes no mention of costs, a discharge should be sought before submitting the bill. If applying to the LAA for assessment, you can apply for discharge at the same time.
13.18For civil licensed work, where the court is responsible for assessment, you must first submit your claim for assessment by the court; and when that is complete, make a claim for payment from the LAA within three months of the final assessment certificate being received from the court.
13.19Where the LAA is responsible for assessment you must submit a claim within three months of the right to claim accruing.
6Standard Civil Contract 2013 Specification paras 6.34–6.36. Frequent submission of late claims may lead to contract sanctions.
7Standard Civil Contract 2013 clause 14.5.Enhanced rates
13.20In certain circumstances, you can apply for payment at an enhanced rate. The LAA will consider whether enhancement is justified, and if so will increase the hourly rates for some or all of the work done on the case. It would be very unusual for enhanced rates to be allowed on routine items such as travel and waiting (where payable) or letters and telephone calls.
13.21The test for enhancement is that:
•the work was done with exceptional competence, skill or expertise; or
•the work was done with exceptional dispatch; or
•the case involved exceptional circumstances or complexity,
compared with the generality of proceedings.
13.22Where the test is met, the LAA will allow a percentage increase to the relevant hourly rate not exceeding 50 per cent, or in cases in the Upper Tribunal or the High Court or above 100 per cent.
8Civil Legal Aid (Remuneration) Regulations 2013 reg 6(3). The amount of the percentage increase will be determined by having regard to:
•the degree of responsibility accepted;
•the care, speed and economy with which the case was prepared;
•the novelty, weight and complexity of the case.
Conditional payment for judicial review
13.23For cases started on or after 22 April 2014, payment for work done between issue of proceedings and grant of permission in judicial review cases was made conditional on either:
9Civil Legal Aid (Remuneration) (Amendment) (No 3) Regulations 2014.•the court granting permission; or
•notwithstanding that no permission was granted, the LAA agreeing to discretionary payment.
13.24The LAA would only agree to payment of pre-permission work in cases where permission was not granted if:
•the court neither granted nor refused permission, and it considers that it is reasonable to pay remuneration in the circumstances of the case, taking into account, in particular–
•the reason why the provider did not obtain a costs order or costs agreement in favour of the legally aided person;
•the extent to which, and the reason why, the legally aided person obtained the outcome sought in the proceedings; and
•the strength of the application for permission at the time it was filed, based on the law and on the facts which the provider knew or ought to have known at that time.
13.25Disbursements – including court fees – will always be payable, but the above provisions affect both solicitor and counsel fees. Payment on account applications may be made in the usual way, but will be recouped if payment is not authorised.
13.26However, on 3 March 2015 the High Court found the regulations to be irrational in the case of
R (Ben Hoare Bell Solicitors and others) v The Lord Chancellor.
10[2015] EWHC 523 (Admin). The regulations were quashed on 24 March 2015, meaning that the above amendments to the remuneration regulations were of no effect. Therefore, payment was once again available in all judicial review cases started since 22 April 2014.
13.27Rather than appeal the judgment, the Lord Chancellor accepted it but immediately laid new regulations that affected all certificates granted on or after 27 March 2015, which effectively reinstated the quashed regulations with some amendments aimed at alleviating the grounds on which the Court found against them.
13.28The Civil Legal Aid (Remuneration) (Amendment) Regulations 2015
11SI No 898. Reg 2 inserts reg 5A in to the Civil Legal Aid (Remuneration) Regulations 2013. provide that, for all certificates applied for on or after 27 March 2015, payment for judicial review work done pre-permission is conditional on one of the following:
•the court giving permission;
•the defendant withdrawing the decision to which the application for judicial review relates, resulting in the court refusing permission or making no decision on permission;
•the court ordering an oral permission hearing or an oral hearing of an appeal against a refusal of permission;
•the court ordering a rolled up hearing; or
•the court neither granting nor refusing permission but the Lord Chancellor considers it reasonable to pay remuneration in the circumstances of the case, taking into account, in particular:
•the reason why no costs order or agreement was obtained;
•the extent to which, and why, the outcome sought was achieved; and
•the strength of the application for permission at the time it was filed, based on the law and on facts which the provider knew or ought to have known at the time.
Existing certificates granted before, but to which new judicial review proceedings are added on or after, 27 March 2015, are also subject to these rules.
Assessment of costs by the LAA
13.29Assessment of costs is governed by the 2013, 2014 or 2015 Contracts (as appropriate), the Remuneration Regulations 2013 (as amended) and the Civil Procedure Rules.
13.30Where proceedings have been issued, the LAA assesses all bills where profit costs are up to £2,500 (excluding VAT). Bills in excess of £2,500 are assessed by the court. The exception to this is where there is an element of costs between the parties, where the bill is assessed by the court regardless of the size of the claim. There is provision in the Contracts for the LAA to take over assessment of all claims, but it has never been brought into force.
Costs appeals
13.32If costs for exceptional controlled work or licensed work are reduced on assessment, you can appeal. You may want to do this, even if the effort of preparing the appeal seems disproportionate to the reduction in fees, if a successful appeal would improve your key performance indicators (see chapter 20).
13.33Appeals must be made in writing and accompanied by the file. An LAA Internal Reviewer will carry out a formal and detailed review of the original decision. If you remain dissatisfied, there is a further right of appeal to an Independent Costs Assessor. The Independent Costs Assessor is an experienced solicitor in private practice, and not a member of the LAA’s staff. The Independent Costs Assessor may confirm, increase or decrease the amount assessed.
13.34Any appeal to an Independent Costs Assessor is considered on paper, although in exceptional circumstances either party can apply to the Assessor for an oral hearing. Such requests are rarely granted.
13.35See the Standard Civil Contract 2013 Specification paras 6.67–6.86 for more information on costs appeals. There are equivalent provisions in the 2014 and 2015 contracts.
Points of principle of general importance
12There is no right to apply for POPs under the 2014 or 2015 contracts and so this is now only possible in housing, family and immigration cases in other categories.13.36At any point after the submitting of an appeal to the Assessor, but not later than 21 days after receipt of the final decision, the LAA or the provider can seek clarification on the costs rules and provisions. This is done by applying for a certificate of a point of principle of general importance (POP). POPs are the LAA’s equivalent of costs case-law, and are binding on regional offices and Independent Costs Assessors when assessing bills. They are not binding on the courts. Applications can be made to the LAA or direct to an Assessor if one has been appointed. The application must set out the exact wording of the POP sought. The LAA will decide whether the matter should progress to the Costs Appeals Committee, which will decide whether a POP should be certified. The text of current POPs, and the procedure for applying for one, are set out in the POP Manual.
13See www.gov.uk/legal-aid-points-of-principle-of-general-importance-pop.Assessment of costs by the courts – legal aid only
13.37Bills to be assessed by the courts must be drawn up in the form prescribed by the Civil Procedure Rules and the Senior Court Costs Office Guide. A costs draftsman’s fee can be claimed on the bill. The bill should then be submitted to the court using the appropriate notice, and accompanied by the relevant fee. Each court and costs office has its own local practices; some will require just the bill, certificate, orders and fee notes and invoices, others the full file of papers.
13.38The forms to be used, the Guide, and a list of fees for different types of case, are available on the Justice website at
www.justice.gov.uk/courts/rcj-rolls-building/senior-courts-costs-office. Unless a hearing before a district judge or costs officer is requested, assessment will be on the papers. On receipt of the returned assessed bill, the time limit for appealing the assessment begins to run. Solicitors should notify counsel of reductions to their costs within seven days, and all appeals should be submitted within 14 days. Solicitors appeal on behalf of counsel.
13.40Once the assessment process is completed, you should draft the Costs Certificate, and return to the court for sealing with the appropriate fee. The sealed Costs Certificate, the assessed bill, the funding certificate, and fee notes should then be submitted via CCMS for certificates granted under CCMS or sent to the LAA with form CIV CLAIM1 for payment if on paper.
Assessment of costs by the courts – inter partes, and legal aid where the client has an interest in the assessment
13.41Where the bill is entirely inter partes, or mixed inter partes and legal aid, the bill must be served on the other side before assessment proceedings begin. The other side has three weeks to accept the bill or serve points of dispute, to which you should respond. If agreement cannot be reached, the bill should be sent to the court for assessment. In disputed cases, a hearing before a district judge or costs officer is usual. The procedure then follows that outlined above.
13.42The client has an interest in the assessment if the statutory charge arises, or if a contribution has been paid. The client has the same right to dispute the bill, and to be represented on the assessment, as any other paying party. If the client does not respond, or chooses not to exercise that right, the solicitor should certify accordingly on the bill.
13.43Following assessment, the sealed Costs Certificate should be submitted to the LAA as above, but using form CIV CLAIM2 if a non-CCMS claim, which is used to report to the LAA in cases where another party is liable for all or part of the costs. If the other party cannot or will not pay, the solicitor can either take enforcement proceedings, or assign the costs to the LAA. In this scenario, the LAA will pay the costs, but only at prescribed rates, not inter partes rates, and then pursue the paying party for the costs.
Inter partes costs and legal aid only costs
13.45In cases where inter partes costs are possible, it is not uncommon for costs to be ordered or negotiated on the basis of payment of part of the costs of the case. If so, it is important that you are clear as to the terms of the order or agreement, as in some cases but not others you may be able to claim the balance from the legal aid fund. The Standard Civil Contract allows you to claim from the legal aid fund any costs not payable by another party (legal aid only costs), but only if certain conditions are met.
14Standard Civil Contract Specification 2013 paras 6.51–6.52.13.46The Specification defines ‘legal aid only’ costs – costs that can be claimed from the legal aid fund even where inter partes costs are recovered – as:
•costs of completing legal aid forms and communicating with the LAA;
•certain limited types of costs disallowed or not agreed;
•costs of work not covered by a costs order or agreement.
13.47Where a costs order or agreement specifies that another party should pay a proportion of the client’s costs (but not a fixed sum), the same proportion of the total work that is not covered is legal aid only costs.
13.48To take a practical example, say total costs on the case are £2,000 at legal aid rates and £4,000 at inter partes rates. If the other side agree to pay your costs in the sum of £2,000, that could be expressed in one of three ways:
•£2,000 as the total agreed costs of the case;
•agreement to pay costs between x and y dates, totalling £2,000; or
•agreement to pay 50 per cent of the costs, being £2,000.
In each case, you receive £2,000 from the other side. In the first case, that £2,000 represents the total costs of the case, so there are no legal aid costs (apart perhaps from £100 or so for filling in the APP1 and so on). In the second case, costs outside the agreed dates are not subject to the costs order, so you can claim those costs from the LAA in addition to the inter partes costs you have received. In the third case, the other side have agreed to pay 50 per cent of your costs, so the other 50 per cent are legal aid only costs, so you can claim £1,000 (50 per cent of £2,000 at legal aid rates) from the LAA, in addition to the £2,000 from the other side.