Statutory tests of taxation and payment from the Fund

The following regulations form the basis, set by Parliament, on which you are entitled to payment and is termed the standard of taxation.

It is the test (or benchmark) against which we are required to assess an account, and it is important that you have an understanding as to the basis on which an account is properly payable.

In circumstances where we cannot allow a charge on the information provided, in whole or in part, we require to restrict the charge.

Section 4(2)(a) of the Legal Aid (Scotland) Act 1986, states that only such sums as are due in respect of fees and outlays properly incurred by a solicitor or counsel, by virtue of the Act or regulations, can be paid out of the Fund.

Accounts submitted in relation to criminal legal aid are regulated by the Criminal Fees Regulations.

Regulation 10(1) of the Criminal Legal Aid (Scotland)(Fees) Regulations 1989, provides that:

“Counsel shall be allowed such fee as appears to the Board, or at taxation the auditor to represent reasonable remuneration, calculated in accordance with Schedule 2 or 3, for work actually and reasonably done, due regard being had to economy”.

Schedule 2, Part 1, Chapters 1 and 2 prescribes separate Tables of Fees specifying the fees payable to counsel depending on the status of counsel for proceedings in the

• High Court of Justiciary in respect of first instance proceedings.

Schedule 2, Part 2, Chapters 1 and 2 prescribes separate Tables of Fees specifying the fees payable to counsel depending on the status of counsel for proceedings in the

• High Court of Justiciary and Sheriff Appeal Court in respect of Appeal proceedings.

Schedule 2, Part 3, Chapters 1 and 2 prescribes separate Tables of Fees specifying the fees payable to counsel depending on the status of counsel for proceedings the

• Sheriff and Justice of the Peace court in respect of first instance proceedings.

Schedule 2 is accompanied by detailed notes on the operation which set out the circumstances when a fee is, and is not, payable for the majority of work that you will undertake.

These notes are an essential element of the assessment process and you must apply them, where appropriate.

Schedule 3 is the Tables of Fees for proceedings in the United Kingdom Supreme Court (UKSC).

Regulation 10(2) of the Criminal Legal Aid (Scotland)(Fees) Regulations 1989, provides that:

“Where work done by counsel constitutes a supply of services in respect of which value added tax is chargeable, there may be added to the amount of fees allowable to counsel an amount equal to the amount of value added tax chargeable thereon.”

Regulation 10A of the Criminal Legal Aid (Scotland)(Fees) Regulations 1989, provides that:

“In determining whether work has been actually and reasonably done for the purposes of these Regulations the Board, or as the case may be the auditor, is to deem solicitors and counsel to be as up to date with the substantive and procedural law of the field in which they practise as a competent solicitor or counsel practising in that field.”

Only in exceptional cases, and where the Table of Fees allow, where a novel, developing, unusual or complex point of law arises, requiring legal research, will consideration be given to paying any such charges.

This is consistent with the English authority of Perry and Another v The Lord Chancellor Times Law Reports 26.5.1994.

ABWOR is simply a type of advice and assistance where representation can be provided, but only for the proceedings listed in the ABWOR regulations.

Accounts submitted in relation to ABWOR are regulated by The Advice and Assistance (Scotland) Regulations 1996.

There are no prescribed fees for counsel under and advice and assistance and your fees must be claimed and assessed an outlay in the instructing solicitor’s account in terms of Regulation 17(1) of the Advice and Assistance (Scotland) Regulations 1996, which provides:

“that fees and outlays allowable upon assessment by us, or taxation by the Auditor, can only be for work actually, necessarily and reasonably done and outlays actually, necessarily and reasonably incurred in connection with the subject matter of the advice and assistance, due regard being had to economy.”

There are four elements to the test, all of which must be satisfied.

You must never ask a client to put you in funds to cover your fees at a time when advice and assistance or legal aid is being provided.

It is worth discussing the standard of taxation in some detail.

An understanding of the legal basis on which we are tasked with assessing an account is fundamental to our approach, see Parks v Colvilles Limited (1960) S.C. 143 per. Lord Patrick at page 153 where, in identifying and supporting a third party standard, his lordship states:

“In these instances the parties controlling the fund…have had no voice in controlling the scale on which the expenses were incurred.”

This is important. The standard of taxation applicable to the assessment of a legal aid account is solicitor and client, third party (Fund) paying.

This standard is quite different from the two standards, or modes of taxation as between solicitor and client:

• on a solicitor and client, client paying basis, where the test is the client is liable to his solicitor for all expenses reasonably incurred, even although they could not be recovered from the other side, and for any expenses which he has specially authorised (MacLaren: Expenses at 509)
• on a party and party basis, where the test is on the basis of such expenses as are reasonable for conducting the proceedings in a proper manner.

There is a body of law defining the scope, structure and application of the third party standard.

According to Sheriff MacPhail, the taxation of an account as between solicitor and client, third party paying should be closer to the taxation standard of party and party (following an Interlocutor awarding expenses against an opponent without qualification) than between a solicitor and his own client.

Macphail continues, at Sheriff Court Practice, 4th edition, (2002), chapter19.56, that the third party paying mode, while “not so generous” as in a taxation between solicitor and client, client paying, “is yet not quite so rigorous as the taxation between party and party”.

In short, some work undertaken by you may not be chargeable to the Fund on a third party basis of assessment, and the client’s or instructing solicitor’s authority or approval is not necessarily determinative in the context of publicly funded advice.

It should be noted that:

• the requirement that an item of work has to be “actually” done is stated and not implied; and
• the phrase “due regard to economy” is a clear injunction to a solicitor to address the question of cost actively in the way in which fees and outlays are incurred in the course of the advice and representation that is being provided.

Sheriff MacPhail also quotes the dicta of Lord McLaren in the case Hood v Gordon 1896 23R 675, as follows:

“…when a statute authorises the taxation of expenses as between agent and client, what is given is the expenses which a prudent man of business, without special instructions from his client, would incur in the knowledge that his account would be taxed.”

The term “prudent man of business” can be read as a “prudent counsel”.

The aim of this guidance is to provide you with an indication as to how your account may be taxed: what we as the paying party, applying the third party test, consider to be chargeable and shall allow in the assessment of an account, and in our determination as to whether the work undertaken was reasonable and calculated in terms of the Tables of Fees, see the observations of Lady Rae in the Note of Objections by Mark Stewart QC 3 July 2014.

According to James Hastings, formerly Principal Clerk of the Office of the Auditor of the Court of Session, in his work “Expenses in the Supreme and Sheriff Courts of Scotland” (1989) at page 112, he explains that the benefit of any doubt is to be given to the paying party where the legal aid Fund is paying in the event of uncertainty or lack of supportive detail in respect of a claim.

It is important to emphasise that the benefit of the doubt test is not engaged where we, or an Auditor as the case may be, is not in any doubt about the basis of a claim on the legal aid fund.