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LSC get slapped wrist by NAO for £25m legal aid overpayments to law firms

The head of the National Audit Office, the Comptroller and Auditor General, has today qualified the accounts of the Legal Services Commission for 2008-09 because of overpayments made by the Commission to solicitors, estimated at almost £25 million. The Legal Services Commission is responsible for the provision of legal aid in England and Wales through the Community Legal Service Fund (for civil cases) and the Criminal Defence Service (for criminal cases).
The NAO, as part of its annual audit of the Legal Services Commission, identified an estimated total overpayment to solicitors of £24.7 million in 2008-09. Of this, £6.4 million were payments made to solicitors where legal aid had been provided to claimants where there was no evidence that they were eligible to receive it. The remaining £18.3 million of erroneous payments were made to solicitors working on cases which were eligible for legal aid, but in which solicitors over-claimed for the work they did.
The highest level of financial error was in relation to solicitors working on Family and Immigration claims. Within this area, the NAO’s testing showed that 25 per cent of the claims examined were incorrect or unsupported. For many cases, the error resulted from solicitors claiming against an incorrect category of work or for an incorrect level of work carried out. For example, the NAO identified a number of instances where the solicitor had incorrectly claimed a fee for an asylum case instead of the correct, and lower, fee for immigration work.
The LSC recognises there are a number of factors contributing to this level of error, including the complexity of the fee regime, the limited controls to validate the accuracy of the submitted claims, and the quality of the Commission’s post-payment internal assurance processes. In the NAO’s view, this, together with the absence of a strict sanctions regime to deter the submission of incorrect claims, creates a risk of solicitors exploiting the payment system.
Mr Amyas Morse, head of the National Audit Office, said today: “A significant sum of taxpayers’ money is being paid to solicitors in error. The Legal Services Commission needs to build on its existing efforts to tighten its controls on payments to solicitors and on how it monitors the eligibility of cases supported by legal aid. Where appropriate, the Commission should also impose sanctions on solicitors found to be making incorrect claims.”