When a case concludes, solicitors are required to complete the final costs assessment procedure and inform the Legal Aid Agency (LAA) that the case has been settled. Whilst there are no late submission penalties imposed for matters opened after 2007, the Legal Aid Agency still requires a case to be reported to them, irrespective of whether costs have been claimed or not.
During a case, solicitors may claim Payments on Account (POAs) for profit costs, of which the LAA will pay 75% of the costs and disbursements incurred under the client public funding certificate. Counsel will also claim POAs for their costs under the same certificate. Once a final claim has been submitted and assessed by the LAA, they will recoup the POA made to the firm with the remaining balance due paid.
Unfortunately, it is not always this simple.
What are Unrecouped Payments on Account?
Unrecouped Payments on Account (UPOAs) are Payments on Account made to a supplier which have yet to be returned to the Agency.
The LAA periodically contact firms requesting payments are made back. This is done when, going back to cases that are several years old, POAs have been loaned to the firm but a final claim was never submitted.
UPOAs intervention has been ongoing for a number of years. Previously, the LAA would automatically discharge a public funding certificate and would submit a nil bill to trigger the recoupments on a monthly basis. This procedure could have resulted in thousands of pounds being recouped, thus affecting a firm’s cash flow.
In February 2018, the LAA introduced a new process to assist providers, giving them a useful way to keep track of the billing on outstanding matters.
Every two months, the LAA will send a firm a list of outstanding certificates, outlining final bills which are yet to be submitted. The LAA states this is not a demand for payment, nor is it an intent to make recoupments, but simply a reminder that matters are still outstanding. The LAA will also continue to contact providers on matters which they are concerned about; it is up to the provider to update the LAA about when a final claim is likely to be submitted.
What happens if the LAA has made recoupments without a final claim being submitted?
Whilst the LAA may have recouped POAs, this does not mean a final claim cannot be submitted. As a nil bill is no longer automatically put through by the LAA, the certificate will remain live until a final claim has been paid, or otherwise until it has been reported that no claim will be made on the fund.
The LAA will monitor firms to ensure that they are not owed large amounts of money, periodically recouping funds over the years to ensure that, in the event of financial difficulty or closure, a large debt is not owed to the LAA by that firm.
How can we help?
At NS Costings, we are experts in dealing with matters that have been outstanding for years. We are able to analyse the issues preventing final claims from being submitted and offer suggestions on how these can be resolved. With experience in working through UPOA lists and resolving outstanding matters swiftly and to the highest quality, we ensure payments are made quickly and efficiently, meaning that your firm’s cash flow is not affected as a result of having large sums recouped periodically due to no final claim submissions.
To find out how we can assist you with any UPOA interventions, do not hesitate to contact us.