Recoupment and limitationRecoupment of funds paid on account:limitationRecoupment of funds paid on accountGetting paid for civil and family workRecoupment of funds paid on account:limitationRecoupment of funds paid on accountGetting paid for civil and family workRecoupment of funds paid on account:limitationRecoupment of funds paid on accountGetting paid for civil and family workRecoupment of funds paid on account:limitationRecoupment of funds paid on accountGetting paid for civil and family work
13.49The authority in relation to the limitation period in which the LAA can recover funds paid as payments on account is
Legal Services Commission v Henthorn.
1[2011] EWCA Civ 1415. The then Legal Services Commission (LSC) pursued recoupment of payments on account from a retired barrister, Aisha Henthorn. The cases dated back to between 1992 and 1998, with the LSC’s claim issued in 2006. Henthorn argued that the six year limitation period ran from the end of the case, and therefore the LSC were out of time in bringing the case against her. The High Court agreed and the LSC appealed. The Law Society and the Bar Council intervened in the Court of Appeal.
13.50The Master of the Rolls held that time begins to run not at the end of the case, but only once the assessment process has been completed and therefore there has been a determination of how much the LSC owes solicitor / counsel, or how much they owe the LSC by way of recoupment of payments on account. He further held that the LSC’s claim was not an abuse of process nor was it unreasonable in public law terms, and that on the facts of the individual payments, Ms Henthorn had no defence to the claims. The LSC were therefore entitled to recovery of payments on account.
13.51The effect of this case is that once a final bill is assessed, time starts to run for the purposes of the limitation period and the LAA cannot demand repayment of unrecouped payments on account more than six years after the date of final assessment. However, if no final bill was ever submitted, limitation never starts to run and so the LAA can recover payments on account at any time.
13.52It is therefore critical that organisations hold good records regarding the discharge and final payments of claims and keep those for at least six years, until claims for the refund of payments on account become statute barred under the Limitation Act 1980.