Legal Services Commission’s Standard Contract 2010 (article 5)

General introduction to the series of articles
As from the 1st of February 2012, when new contracts started with Family and Family with Housing practitioners, the Legal Services Commission’s mainstream face-to-face civil and crime providers have been operating under the same standard terms. It is unlikely that many people have had the time and/or motivation to read the contract but it is useful to know what’s in it.

In this series of articles Vicky Ling considers the impact of the contract from a practical point of view, to help you operate in a way which suits you and your clients, and won’t fall foul of the LSC.

Clauses 6 and 7: Marketing and Self-monitoring

Marketing
Although referral fees are allowed in principle by the Solicitors’ Code of Conduct, as long as the client is aware of them and they do not compromise the solicitor’s ability to advise in the client’s best interests, they are completely prohibited by the LSC’s contract. You may neither pay nor receive referral fees. The contract also prevents any inducement, including money or other gifts to a client or potential client. Happily, items of refreshment for immediate consumption by clients are permitted, to the relief of many criminal defence practitioners and clients alike.

The LSC learned the hard way that leafleting housing estates in poor states of repair, in areas of high unemployment, offering ‘free’ welfare benefits checks or ‘free’ housing disrepair surveys, resulted in unplanned legal aid expenditure in the north-west of England during the 1980s and 1990s. Such marketing is explicitly banned under the 2010 contract.

Self-monitoring: professional obligations and performance
It does seem somewhat otiose that the contract requires you to comply with all relevant legislation, and adds the rules of any relevant professional body for good measure. The funding code and decision-making guidance are mentioned explicitly. You must also have a printed copy of the current LSC Manual or on-line access to it through a recognised licensee.

Some of the requirements in the contract seem superfluous to solicitors, as they already have to comply with the Code of Conduct; but don’t forget that that a number of Citizens Advice Bureaux and independent advice agencies without solicitors hold contracts. Also, Law Centres are currently exempt from regulation as entities by the SRA, so only the solicitors working within them are currently subject to the code.

In that light, the LSC is prudent to include contractual requirements to act in the best interests of clients, and advise them to obtain independent advice if organisations become aware that they might have claim against them.

You must have professional indemnity insurance (including for a period of six years following the expiry and/or termination of this Contract). If you are a registered charity, this must provide, as a minimum, cover of at least £1 million in respect of each claim or series of related claims.

As made clear in the Code of Conduct, solicitors’ responsibilities to clients are not suspended in the event of problems such as a computer system failure, fire, flood or other major disruption. Therefore, firms of solicitors must have a Business Continuity Plan, which is also compulsory for all organisations under the Contract.

Self-monitoring: costs information and performance monitoring
Again, some requirements are dealt with under the code of conduct, for example, ensuring that clients are provided with costs information and having a client complaint procedure.

The LSC specifies things which your IT system must be able to do:

  • Identify all your contract work files as such;
  • Identify client conflicts;
  • Identify relevant matters and cases when acting in a number of Matters and/or cases for one client;
  • Produce a list of all matters and cases that are open and closed;
  • Monitor key dates;
  • Time recording;
  • Produce an up to date record of the value of your work in progress;
  • Access the LSC’s website;
  • Have at least one operational email address.

Performance monitoring is an area where most firms of solicitors are relatively weak. This can result in the LSC raising issues and the firm being taken by surprise because they have no idea that they have a problem, for example in relation to the percentage of applications and bills that are refused and rejected.

The contract requires that you have processes to monitor performance and compliance with the Contract, and take prompt and effective corrective action where necessary. Quality of advice and other legal work can be monitored through an over-view of file review findings. Sadly, firms are often not aware of whether all departments are undertaking file reviews. The impact can be devastating, as often failure to carry out file reviews is an indicator that other, sometimes serious, things are going wrong. If these come to light at a Contract Manager visit, it can result in contract termination before the firm has a chance to put things right.

Monitoring obligations could well be an area where there is an overlap with the duties of COLPs (Compliance Officers for Legal Practice) under the code of conduct, and so firms which have not paid much attention to this area may want to think again.

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