Payments on account – LSC win on appeal

The Court of Appeal gave judgement today in the Henthorn case (Legal Services Commission v Henthorn [2011] EWCA Civ 1415). The judgement is available here, and our post following the High Court hearing here.

The LSC pursued recoupment of payments on account from a retired barrister, Aisha Henthorn. The cases dated back to between 1992 and 1998, with the LSC’s claim issued in 2006. Henthorn argued that the six year limitation period ran from the end of the case, and there the LSC were out of time in bringing the case against her. The High Court agreed and the LSC appealed. The Law Society and the Bar Council intervened in the Court of Appeal.

Giving judgement in favour of the LSC, the Master of the Rolls held that time begins to run not at the end of the case, but only once the assessment process has been completed and therefore there has been a determination of how much the LSC owes solicitor / counsel, or how much they owe the LSC by way of recoupment of payments on account. He further held that the LSC’s claim was not an abuse of process nor was it unreasonable in public law terms, and that on the facts of the individual payments, Ms Henthorn had no defence to the claims. The LSC were therefore entitled to recovery of payments on account.

That this is a significant case is shown by the intervention of both the Law Society and the Bar Council. It was based on the Civil Legal Aid (General) Regulations 1989, which were made under the Legal Aid Act 1988 scheme but continued to apply until 2007 as they were preserved by the General Civil Contract. For cases started since 2007, there is a different regime under first the Unified and then the Standard Contracts for the management and recoupment of payments on account. Therefore this judgement will apply to all pre-2007 cases and we can expect to see the LSC stepping up recoupment activity in the coming months.

For cases started pre 2007, see the Civil Legal Aid (General) Regulations 1989 and the General Civil Contract, especially section 6. For Unified Contract cases, see Clause 18 of the Standard Terms, especially cl 18.5, which determines when payments on account become repayable. For Standard Contract cases, see the Specification, especially paras 6.29 and 6.30.