Covid-19: Provision now available to submit interim claims under advice and assistance where there is a prospect of property being recovered or preserved

We explained in our update that with effect from 5 August 2020 we have powers to temporarily disregard any property (of whatever nature and wherever situated) which may, at a future date, be recovered or preserved for the client.

This is a further Covid-19 measure designed to assist the profession and is in addition to the earlier measures. The claim process (see below) does not require a full account at the interim claim stage.

Solicitors however should be clear that any payment is an interim payment and is subject to later full assessment and events. A claim can only be submitted if the action is ongoing and you still act for the client. Any sum so paid as an interim claim will be repayable, whether fully or in part, if either one or both of the following occurs:

  1. At any time prior to or after such interim payment that person or any solicitor acting on that person’s behalf has, in respect of the same matter for which advice and assistance was provided:
    • received any expenses which (by virtue of a judgment or order of a court or an agreement or otherwise) are payable to that person; or
    • recovered or preserved any property (of whatever nature and wherever situated), including that person’s rights under any settlement arrived at in connection with the matter in order to avoid or bring to an end any proceedings.
  1. At any time after such interim payment SLAB determines that there has been overpayment of fees or outlays in the sum claimed and paid

The sum recoverable will be the amount of fees and outlays paid inclusive of VAT, less any amount which would have been properly payable by way of fees and outlays under Section 12(3)(d) of the Act.

Where there is a repayment requirement SLAB can seek to recover from either:

(a) The solicitor to whom the payment from the Fund is made; or

(b) The person to whom the advice and assistance was provided.

It should be noted, however, that in many or most situations where there is recovery the funds will be paid to the solicitor and it is to the solicitor that SLAB will look for any repayment due – see later comments.

How to make an interim claim

We have now made the necessary system changes that will allow you to submit claims.

You should be aware that the simplified process for submitting an interim claim in respect of solicitors fees in potential property recovered or preserved cases is entirely different to how you would make a claim in non-recovery cases and it is very important that you follow the detailed guidance below when you make a claim:

It is essential when making any claim that you take into consideration the limits of authorised expenditure that are in place and you should ensure that you do not claim for any work which exceeds those limits.

We cannot, in terms of the Act and regulations, retrospectively grant an increase in authorised expenditure under advice and assistance or make payment of fees or outlays which exceed the authorised expenditure limits. In the case of Drummond & Co. -v- Scottish Legal Aid Board 1992 SC (HL) 1, the House of Lords accepted that our prior approval for an increase was required.

We will pay the fees that you certify as being properly incurred in full subject to those sums not exceeding the maximum level of authorised expenditure which is available.

Post payment procedures

After you have received an interim payment, we will continue to monitor the case and, where necessary, we will remain in regular contact with you for an update on whether the action has settled, or until your involvement in the case has come to an end. It is your responsibility to advise when either of those situations arise.

We will be happy to provide any assistance necessary that will allow you to determine whether or not a recovery or preservation has been made and to confirm if any money is due to be repaid to SLAB.

The procedures that will follow will depend on a number of factors including but not necessarily limited to:

  • Whether there has been any recovery or preservation;
  • The nature of the sums recovered or preserved (i.e. liquid or illiquid funds); and
  • Whether you intend to submit a hardship application.

A brief summary of those procedures are outlined below:

  • No recovery or preservation made

    The final account should be submitted to SLAB.

    The sums paid by way of interim payments will be discounted from the final payment and you will receive payment of the balance of any sums due.

    In the unlikely event that the interim sums paid exceed the final payment we will take steps to recover the sums to be refunded from the solicitor to whom the payment from the Fund is made.

  • Recovery or preservation made and no hardship application is to be submitted

    You or your client will require to repay to SLAB the total sums paid by way of interim payments.

    Your final account should be submitted to the client.

  • Recovery or preservation made and hardship application submitted

    You should follow the guidance provided below on how to make a hardship application.

    If the hardship is granted the sums paid by way of interim payments will be discounted from the final payment and you will receive payment of the balance of any sums due.

    In the unlikely event that the interim sums paid exceed the final payment we will take steps to recover the sums to be refunded from the solicitor to whom the payment from the Fund is made.

    If the hardship is refused you or your client will require to repay to SLAB the total sums paid by way of interim payments. Your final account should be submitted to the client.

  • Where action still ongoing (i.e. change of solicitor, etc.)

    In line with current practice you should continue, where possible, to engage with any new incoming solicitor to establish when the case concludes as to whether any recovery or preservation has been made.

    You cannot submit any further interim payment of fees or outlays where your involvement has come to an end.

    If the case concludes and there has been no recovery of preservation then the account should be submitted to SLAB.

    A hardship application can be submitted once the case has concluded and a recovery or preservation has been made.  If the hardship application is granted the sums paid by way of interim payments will be discounted from the final payment and you will receive payment of the balance of any sums due.

    In the unlikely event that the interim sums paid exceed the final payment we will take steps to recover the sums to be refunded from the solicitor to whom the payment from the Fund is made.

    If the hardship is refused you will require to await on the case concluding before submitting your final account to either SLAB (non-recovery) or the client where a recovery has been made and you will require to repay to SLAB the total sums paid by way of interim payments.

Hardship Applications

If property has been recovered or preserved then you or your client will continue to have the option to submit a hardship application, where appropriate. More information on the hardship application process is available below.

  • Client hardship applications please refer to the guidance here
  • Solicitor hardship applications please refer to the guidance here
  • How to submit a hardship application here

Repayment of interim fees and outlays

We anticipate that in the majority of cases the property recovered will take the form of payment processed via the solicitor, and we expect and require the solicitor to make reimbursement of the interim payment from the recovered amount, where the solicitor makes arrangements for their final account to be paid from the funds recovered.

There will however be situations where the property recovered or preserved will have been made or retained directly to the client and it will be appropriate for us to liaise directly with the client in respect of the reimbursement in such cases. This may include the setting up of an appropriate payment plan with the client.

There is also the prospect of a repayment being necessary where the final account is to be paid by SLAB but the sums payable are less than the sums paid by way of interim fees and outlays.

Different repayment arrangements will apply depending on the circumstances – see below for details.

Option 1

Where there has been property recovered or preserved and you are returning the sums which have been paid by way of interim fee and outlays you should arrange a bank transfer to our Principal Sums Account using the following details.

Bank: RBS

Sort code: 83-06-08

Account Number: 00193901

Please provide details of the client’s advice and assistance reference number when making payment.

It would be helpful if you could arrange to send an online message to Sara Brown in our Civil Finance team when the funds have been returned.

 Option 2

Where there is no recovery or preservation and it is agreed that the final sums payable are less than the sums which have been paid by way of interim fees and outlays you should arrange a bank transfer to our Finance Account using the following details.

Bank: RBS

Sort code: 83-06-08

Account Number: 00193871

Please provide details of the clients advice and assistance reference number when making payment.

It would be helpful if you could arrange to send an online message to Karen Shaw, our assistant accounts manager, when the funds have been returned.

More information

If you have any queries on the update, please contact:

Accounts

Eileen Grant, Assistant Manager Accounts – grantei@slab.org.uk

Property recovered or preserved

Sara Brown, Senior Specialist, Civil Finance – brownsa@slab.org.uk

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