Prevention works better than cure
The Legal Aid agency has numerous audit and validation processes, and the consequences of failing one can be costly. Vicky Ling suggests setting up an internal audit system so you are well prepared when a contract manager pays a visit.
The Legal Aid Agency (LAA) has at least 14 different types of audit and validation processes. Thankfully, it published a guidance document in October 2013 that gives a brief description of each, including its name, which department carries it out, how and where it is carried out (on your premises or the LAA’s), and the potential outcomes. A feature of most is that they can result in recovery of money and the issue of a contract notice. However, if you use the information you gather from your file reviews in the right way, you can minimise the chances of this happening.
Most costs assessment issues start with a contract manager (CM) visit.
Practitioners should have a CM visit every year to check compliance against contractual requirements. These are conducted on your premises and usually take around four to five hours. If compliance is established, there is no further action. However, if even one file is found to be non-compliant, the CM is likely to ask the organisation to self-audit a further sample where they believe the same problem is likely to have occurred. The current approach seems to be to try to identify every single misclaimed file. In the case of civil controlled work, this can sometimes involve going back to the advent of fixed fees in 2007. Note, though, that under clause 8.6 in the Standard Contract Terms (all versions), and the Limitation Act 1980, the LAA can only go back for six years.
A request to self-audit what may be a large number of files puts you in a difficult position, since it will drain your resources and almost inevitably impact on current contract performance. There is nothing in the standard terms or specification that obliges you to do so, but most organisations will, as they want to be seen to co-operate with the LAA.
If you disagree with your CM on a costs point, before the formal process kicks in, they will refer the matter to the operational assurance department at the LAA, which will carry out an internal review. Following this, if you still disagree, there is a formal process (set out in the 2013 Standard Contract Specification paras 6.67–6.86), by which you can make representations that will go to an independent costs assessor.
What should I be doing?
You can use your supervisory file reviews to identify any problem areas, for example:
•Are all forms completed correctly?
•Has the LAA returned any forms due to incorrect completion?
•If a police station case:
■Is the DSCC reference recorded on the file?
■Has the client been contacted within 45 minutes? If not, is the reason recorded?
•With regard to civil and family controlled work and CDS 1/2:
■Is the client financially eligible?
■Does the evidence of means cover the computation period?
•If a friend or family member is supporting the client, is the letter specific about the amount of support and when it started?
•If the client is in detention and apart from their spouse/partner, should the partner’s means be taken into account if the relationship is continuing?
•If a controlled work case, has the sufficient benefit test been met? Was this matter start justified?
•Is funding in place? If a certificated case, is the work within the limitations?
•If an expert has been instructed, is the work within scope and has prior authority been applied for (where possible)?
•Are disbursements supported by vouchers?
•If a private car was used, is there justification for why public transport was not?
It is advisable to include some closed files in the supervisors’ file review samples as they will enable you to check whether:
•the correct fees were claimed;
■the category of fee was correct; and
■it was justifiable to claim more than one fee or it was a series of offences;
•in family cases, there is evidence to justify a level 2 fee (pre-May 2011, this required at least two meetings; since then, ‘substantive negotiations’);
‘The current approach by the LAA seems to be to try to identify every single mis-claimed file. ’
•the correct codes were used; and
•claims were submitted in time (six months after the end date for fixed fee controlled work; three months after the end date for escape fee cases; and three months after the right to claim for licensed work).
Feedback from those involved in drafting bills is valuable and capturing information about why bills were not paid in full is also helpful.
As you have to do supervisory file reviews, it makes sense to make the best possible use of the information that they reveal, rather than simply filing a form away for an annual review.
If you have a practice manager, they may have operational responsibility and be able to gather information from all departments. Ideally, information needs to be co-ordinated and reported back to teams and members/partners on a regular basis.
Preparation is key
It may seem like a big task; but once the system is in place, you will be able to tackle inefficiencies and reduce wasted effort, leading to better use of resources and increased profitability. An internal audit system is an essential part of risk management and will help to give you confidence prior to any assessment or audit, even at short notice.