Legal Services Commission’s Standard Contract 2010 (article 2)

Introductory note: As from February 1st 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.

Clause 3 – Working with third parties
This clause seems pretty straightforward and may not trouble you at all. However, if you are part of a consortium or are thinking of merging with or splitting from an organisation, it is extremely important.

Unless the contract specifically allows you to do so you cannot give, bargain, sell, assign or otherwise dispose of the benefit of any of your rights, or sub-contract, novate or delegate any of your obligations without the LSC’s prior written consent. So, you must tell your contract manager what you are intending to do.

The LSC has recently issued a guidance paper on its approach to novations (see HERE). In practice, the LSC will not split a contract, so if there is a partnership split, you will have to agree which element will take the contract and put the proposal to the LSC. They normally agree, unless there are exceptional circumstances.

The clause states that you are responsible for the fulfillment of all of your obligations under the contract irrespective of whether you have entered into a sub-contract or appointed an agent, counsel or approved third party. In practice the LSC very rarely allows sub-contracting through another organisation, although there is no problem with the use of experts and agents on individual cases. Note though that you cannot use an external person to fulfil the supervisor requirements except with permission and on a temporary basis (we will deal with this in more detail in a subsequent article).

The LSC can require that agents, approved third parties and counsel you appoint possess the experience, qualifications, panel membership, or accreditation that they specify. They can also specify agents and approved third parties who you cannot appoint as well as the maximum payments that you will get for work carried out by approved third parties and counsel. We have seen that they have used this power to limit experts’ fees.

In addition, in most circumstances where you must require approved third parties, agents, counsel or sub-contractors to keep accurate records of the time they spend on the work you have appointed them to do and of the work done. You need to cover this in your letter of instruction. In particular, you must make sure that the LSC has a directly enforceable right to enter the premises of any sub-contractor and audit the contract work that they have done.

The LSC allowed the social welfare law (SWL) combination of debt, housing and welfare benefits to be delivered by consortia. This was helpful to many organisations which could not cover all three subject areas on their own, particularly not-for-profit organisations which could not afford to recruit a solicitor, where a housing contract required one.

However, it did create the need for more complex requirements in the contract, and has sometimes led to complex systems of cross-referral, to meet both the LSC’s and SRA’s requirements.

Once you are involved in a consortium, your fates are almost certainly inextricably linked together. Since you are bound to deliver all three SWL categories of law, if one of you fails or pulls out, the other(s) will also be in breach of the contract. The LSC did publish a guidance paper on how they would treat consortia (see HERE). However, this is now quite old and was drafted long before the LASPO scope cuts. Inevitably, as we draw closer to categories of law going out of scope, consortia will begin to break down. For example, one member may lose their category supervisor and be unable to recruit another. We must hope that the LSC will take a pragmatic and sensible approach towards April 2013, rather than insisting on the letter of the contract being met at all times, thus jeopardising all consortium members, and putting clients’ best interests at risk, rather than allowing orderly wind-down.

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