CoA clarifies position on recovering overpaid legal aid fees

The Legal Services Commission did not abuse process when it sought to recover overpaid legal aid fees to lawyers and it can recover overpaid sums from the point of the costs assessment, the Court of Appeal ruled yesterday.

The ruling, handed down by the Master of the Rolls Lord Neuberger, overturns the first instance decision handed down by Judge Thornton in February.

The CoA held that time starts running not from the date that the case is completed, but once the costs have been assessed by a costs judge.

The respondents had argued that this would have consequences for fee payments by the LSC as barristers and lawyers would not know how much they were entitled to until after the costs hearing.

Neuberger MR, however, said that it was the solicitor’s duty to ensure that a timely costs assessment was carried out.

The judge added: “Where a claim is based on a statutory right subject to a limitation period, which has not yet expired, it seems to me that it would require wholly exceptional facts before an abuse argument merely based on delay could have any chance of success.”

The LSC had gone to the CoA for clarity on the limitation period for recovering overpaid legal aid sums. It had attempted to recover £80,470 from former barrister Aisha Henthorn for overpayments between June 1992 and September 1998.

The barrister, who voluntarily disbarred herself in 2001 due to poor health, contended that she had not been overpaid and that the LSC was out of time to recover the sums because it went beyond the six-year limitation period.

Such was the significance of the matter that the Law Society and Bar Council sought to intervene in support of Henthorn.

CKFT partner Adam Taylor instructed 39 Essex Street’s Jeremy Morgan QC to lead Nicola Rushton of 5 Paper Buildings for the Legal Services Commission.

DaySparkes partner Michael Sparkes instructed Serle Court’s Geraldine Clark to lead Jennifer Haywood of the same set for the respondent Henthorn.

Bindmans partner Paul Ridge instructed Blackstone Chambers’ Dinah Rose QC for The Law Society while the Bar Council instructed Nicholas Bacon QC of 4 New Square.

In a statement the Law Society said: “We’re disappointed with the judgment. We hope Mrs Henthorn appeals and if she does we’d seek to intervene again. This does not affect our separate complaint to the Parliamentary Ombudsman which asserts maladministration by the LSC. 

“We will issue new guidance to members regarding record keeping for legal aid cases, to reflect the judgment.”