Overpayments for Lawyers Hit £76.5m, NAC Won’t Sign Off LSC’s Accounts

Steven Bobson, Europe & Americas Editor
December 01, 2010 /

As overpayments for legal aid has trebled to £76.5m compared last year, the public spending watchdog National Audit Commission (NAC) declined to sign off the accounts of the Legal Services Commission, saying overclaiming is to blame.

NAC said 56.99 percent of the amount, or about £43.6m came from the work-related overpayments of the lawyers while the smaller portion accounted for the cases in which the client’s eligibility “could not be demonstrated.”

In every three family and immigration cases assessed by NAC, only one-third were correct and completely justifiable, the commission said. NAC said it would recover the sum from overpayments “where practical.”

The Legal Services Commission has continued to face cutbacks in its annual budget to as low as £350m. In March, the government announced LSC’s role as part of the Ministry of Justice, which has put the commission under close monitoring, following the resignation of its chief executive.

LSC chairman Sir Bill Callaghan said the commission’s “audit trails, risk management and the recovery of money” have seen an improvement after they have “made significant changes” to their financial management in 2009.

Callaghan believed that LSC’s efforts to develop more rigid practices in accounting and in the management of its legal aid cases “will have both short-and long-term benefits” for their financial stability.

He noted how the industry delivers an “excellent job” to clients seeking legal services and how it manages it. However, Callaghan admitted that some members of the minority have kept asking for overpayments for their services.

“This impacts the legal aid budget significantly each year and can’t be tolerated,” Callaghan said on the overpayments.


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