Compensation for LSC maladministration

You won’t find any mention of it in the contract and there’s no obvious guidance on the Legal Services Commission website, so you might be surprised to learn that the LSC operates an ‘ex gratia’ compensation scheme for situations where individuals or firms suffer financial loss as a result of their mistakes, writes Matthew Howgate.

The lack of guidance available means that we have no clear definition for ‘maladministration’ however the actions that typically amount to ‘maladministration’ include:

  •  administrative error (for example the LSC staff making a mistake or not following their own rules, procedures or guidance);
  • poor service or no service;
  • delay;
  • bad advice or incorrect decision making.

It’s important to remember that not every mistake or delay will amount to maladministration – and that every organisation makes mistakes. The LSC’s ex gratia scheme is intended to provide redress where there have been serious errors or delay which have caused significant loss.

Examples that we have dealt with have included wrongful termination of contracts, wrongful processing of legal aid applications and amendment applications, incorrect advice being given by LSC staff and significant delay in processing or decision making.

In order to make a viable ex gratia payment claim you not only have to prove maladministration but you also have to prove that that maladministration directly caused a quantifiable financial loss. It is akin to bringing any normal claim for damages – negligence / breach followed by loss and backed up by causation. All familiar concepts.

Low value claims are typically considered and determined by the LSC’s customer service team however higher value or more complex claims are referred to the their customer redress committee. This committee is chaired by one of the LSC Commissioners and usually includes a senior member of LSC staff (typically operational staff) and a representative from the LSC’s independent regional review panels.

The committee meets infrequently and there is not normally a right of attendance – so all matters are dealt with on the papers. It remains the applicant’s obligation to make and prove their case, providing all necessary evidence.

The Committee is rightly robust and are extremely careful as any awards made come out of public funds, however they often find against the LSC and make ex gratia awards for maladministration. In the last year alone we have assisted a number of firms to bring successful claims against the LSC. One firm was awarded over £30,000 for the wrongful termination of a contract.

So if you or one of your clients have been the victim of LSC maladministration and have suffered losses as a consequence, why not think about making a claim.

Ask your LSC contract manager about the procedure.










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