What was that we signed?

The 2013 Standard Contract applies to new legal aid Debt, Housing, Family and Immigration and Asylum contracts starting on 1 April 2013, writes Vicky Ling. Many practitioners have understandably been concentrating on getting up to speed with the scope cuts imposed by the Legal Aid Sentencing and Punishment of Offenders Act 2012, and have been signing the contract and sending it back to ensure that they will be able to start work on 2 April; but few have had time to read it carefully. It is true that it is a generic contract with no opportunity for negotiation if you are not happy with anything in it; but important to understand your obligations. This article will bring you up to speed with key features.

On the whole, the changes from the preceding 2010 Standard Contract are not substantive, and were designed to:

  • Comply with LASPO and legislation passed since 2010
  • Simplify, clarify ambiguities and take into account requests by the representative bodies, where appropriate

However, some changes will cause practitioners concern, particularly the right to of the LAA to charge the reasonable cost of further audits if ‘excess claiming’ is concerned, or peer review results are disputed unsuccessfully (Clause 10).

Performing the contract
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 LAA’s prior written consent. This clause seems pretty straightforward and may not trouble you at all. However, if you are thinking of closing down, merging with or splitting from an organisation, it is extremely important. So, you must tell your contract manager what you are intending to do. Clause 22 on novations is also significant.

The LSC issued a guidance paper on its approach to novations in February 2012; but unfortunately this has not survived the move to the Justice website. In practice, the LAA will not split a contract, so if there is a partnership split, you will have to agree which element of the old firm will take the contract and put a proposal to the LAA. They normally agree, unless there are exceptional circumstances.

You are responsible for the fulfilment 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 LAA very rarely allows sub-contracting through another organisation (although the use of agents may be permitted under the housing possession court possession Duty Scheme contract). Note though that you cannot use an external person to fulfil the supervisor requirements except with permission and on a temporary basis. This is dealt with in paragraph 2.10 in the standard contract specification etc.

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 LAA has a directly enforceable right to enter the premises of any sub-contractor and audit the contract work that they have done.

Oddly, the contract still contains provisions in respect of consortia, despite the fact that consortium, bids were not allowed for 2013 Contracts.

Equality and diversity
As so often, the LAA takes a general legal requirement, or a requirement of the SRA code of conduct, and stipulates that organisations with legal aid contracts must comply in particular ways. This is certainly true of its approach to equality and diversity.

To start with, the contract requires that you use all reasonable endeavours to help the LAA comply with current and future discrimination legislation. You must not be found to have discriminated unlawfully by a competent court or tribunal.

You must have regard to the LAA’s equality and diversity guidance, which you can download from its website HERE. It is simply guidance and you are not bound by it; but it does pull together some useful information from other sources and it contains a draft equality and diversity policy, which you are required to have. The Law Society has also issued a helpful and wide-ranging practice note on the issue HERE.

Logos and marketing
It is a shame that neither the legal aid picnic table nor the CLS swirl have made it post LASPO. You are permitted to use the text strapline ‘Contracted with the Legal Aid Agency’ instead, which somehow fails to quicken the pulse and is unlikely to resonate with clients.

You have been given until 30 June 2013 to phase out and stop using old terminology and logos on letterheads, promotional material, websites etc. The LSC issued guidance which can be downloaded from HERE.

Referral fees
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 LAA’s contract. You may neither pay nor receive referral fees in respect of legal aid work.

Performance monitoring
Performance monitoring is an area where most firms of solicitors are relatively weak. This can result in the LAA 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.

The contract contains key performance indicators although you are no longer subject to sanctions for failing to meet them. Your contract manager should offer you the opportunity to discuss the reasons for your failure to meet the KPI, and consider whether it would be appropriate to agree an action plan to remedy the failure or ensure that it was not repeated. The LAA should also take into account the severity of the failure to meet the KPI, previous failures to meet it, any relevant term of the Specification and how many other KPIs you have previously failed to meet.

Performance against KPIs is used as an indicator that something is wrong and the LAA may carry out an audit. The practical problem for practitioners is that establishing whether you meet KPIs or not involves a significant investment of resources in monitoring systems, and the LSC was not consistent about whether or not they enforced them. We wait to see a what the LAA’s approach will be.

The LAA says it may use performance against the KPIs as entry or selection criteria for future contracts. This was also in the 2010 contract but the LSC was not able to use KPIs in this way as it was advised that this could fall foul of procurement legislation requiring it to treat organisations in the same way, regardless of whether they had previously held legal aid contracts.

Protection of the environment
There is an interesting new clause requiring you to work with the LAA in improving the environment, which may include the use of energy efficient vehicles, the reduction, reuse and recycling of waste, efficient use of energy for buildings and equipment and reuse of water and other resources.

Repaying the costs of audits
The LAA will be carrying out far fewer peer reviews (through the Institute of Advanced Legal Studies) than the LSC used to; but they are still taking place. You must be assessed at threshold competence (3) or above. If you fail peer review and your representations are unsuccessful, the costs of the peer review can be recovered from you (likely to be around £1,400.00).

The LSC published checklists of good practice indicators, which organisations can use to benchmark their files and ensure they achieve good peer review scores. There are checklists for crime, family, debt, education, immigration, housing, mental health and welfare benefits, as well as a generic guide. More information can be found on the LAA’s website HERE.

If the LAA identifies ‘excess claiming’ and a further audit is required, you may be required to pay the reasonable costs of that further audit, if it is found that you have made excess claims.  To ensure all your claims are made correctly it is important to follow the Costs Guidance, which will be updated and can be found HERE.

To be eligible for payment, you must submit a claim for payment on the relevant Matter or case in accordance with the provisions of the contract. You must submit a claim within 6 months of closing the case in respect of controlled work (civil standard contract 2013, specification para 4.32), and within 3 months of the right to claim accruing in respect of licensed work (civil standard contract 2013, specification para 6.32 etc).

If you have been overpaid and owe the LAA money, they may consider allowing you to make any repayment of more than £5,000 in a reasonable number of instalments or by making a reasonable adjustment to your Standard Monthly Payments provided that repayment must be over the shortest reasonable period and must usually be complete within the current financial year.


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