Michelmores act for the Lord Chancellor operating as the Legal Aid Agency (LAA) in recovery of Payments On Account (POAs) from solicitors who fail to comply with the legal aid regulations and contracts.

In February 2016, the Lord Chancellor was awarded almost £1m in a successful claim against a legal aid firm for overpaid POAs.

In Lord Chancellor v. Charles Ete & Co. [2016] EWHC 275 (QB), Mr Justice Holgate confirmed the right of the Lord Chancellor to recover over-claimed POAs under contract, statute and in restitution where the solicitors fail to submit any proper final bills.   

Michelmores LLP instructed Nicola Rushton of Counsel. The Defendant firm represented itself.

The Judge observed that the normal expectation is that, where a case has been concluded, a firm will want to have a final bill prepared as soon as possible, so they may recover the balance of their costs. Where this does not happen and the solicitor gives no sufficient explanation for substantial delays, a court may infer unwillingness by the solicitor to comply with billing obligations.

In this case, the Judge concluded that the Firm had given wholly unreliable explanations for the long delays in billing and so had evinced an intention by its conduct not to submit final bills for assessment. This rendered the POAs repayable through both the exercise of the LAA’s statutory power and also under a number of standard provisions of the legal aid contracts. The fact that tax and VAT had been paid on sums received did not constitute any defence to the claim in restitution.

The Lord Chancellor made an offer to settle three months before trial. As the judgment was for more than the offer, the Lord Chancellor was awarded an additional sum of about £64,000, plus indemnity costs, additional interest and interest on costs from the date the offer expired.