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Legal aid payment delays

Date:18 MAY 2010

Law SocietyThe Law Society has warned that delayed legal aid payments from the Legal Services Commission (LSC) are hitting solicitors and their banks again.

Law Society chief executive Desmond Hudson has written to the major clearing banks warning them of the sudden cash flow problem caused by the LSC payment delays, which has been caused by staff cuts at the LSC. 

Hudson points out that due to the LSC delay, which mainly relates to payments of final bills on legal aid certificate cases and requests for payments on account, legal aid solicitors who have been affected might require extended overdrafts until the matter has been resolved.

Desmond Hudson said: "The LSC have confirmed that the payments could take up to eight weeks to process, when they usually take four weeks. We have expressed to the LSC that this is unacceptable and are looking at whether some firms have legal remedies available to them.

"It is unfair on solicitors and their banks to have to pay the price of government inefficiencies. This is a matter that the new Justice Secretary will need to look at as a matter of urgency.

"Many legal aid firms are already operating on a shoestring and a cash flow problem caused by inefficiencies at the LSC is the last hindrance they need. Through our channel of communication with the banks the Society hopes to obtain some much-needed breathing space for the firms affected."

In the letter, Hudson asks that the banks share the information with their local branches and says that the payments should begin to come through shortly, unless the LSC payments are delayed further.

Hudson added: "Following previous payment delays earlier this year, we have been able to establish an intelligence sharing protocol with the banks. While it is unacceptable that we need to do this because of problems in the Ministry of Justice's LSC, it acts as an early warning system for the banks."