Property recovered or preserved: calculating the net liability to the Fund

Section 17(2B) does not provide a definition of “net liability”.  However, section 4 of the Act explains what has to be paid into the Fund and what is paid out of the Fund.

Section 4(2)(a) requires us to pay solicitors and counsel for civil legal aid in accordance with the Act and regulations.  To offset those payments, section 4(3) requires certain payments to be made into the Fund.  Those payments are

  • any contribution payable by the assisted person
  • any expenses recovered from the opponent and
  • any property recovered or preserved needed to cover any net liability of the Fund.

The net liability is the loss to the Fund when payments to the solicitor and counsel exceed any contribution and expenses paid into the Fund.  If there is such a loss, section 17(2B) explains that the assisted person must pay that loss (the net liability) to us from property recovered or preserved.  Thus, the higher your account and fees claimed by counsel, the higher the likely net liability.  If you ask for an increase in fees, this may mean your client has to pay more from any property recovered or preserved, unless the opponent pays sufficient expenses to offset your additional fee.

You can minimise the net liability by trying to ensure that, where appropriate, you seek expenses from the opponent and they actually pay these.

The net liability only applies to amounts we pay for civil legal aid.  It does not include any payments we make for any related grant of advice and assistance.

In a simple example, the net liability is calculated as follows:

Fees and outlays paid to solicitor £2,000
Contribution paid by applicant -£500
Expenses recovered from opponent -£1,000
Net Liability £500

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