Drummond & Co, WS v Scottish Legal Aid Board

The House of Lords held that a solicitor is not entitled to payment from the Legal Aid Fund for advice and assistance given in excess of the statutory limit in section 10 of the Legal Aid (Scotland) Act 1986 unless the Scottish Legal Aid Board's approval to exceed that limit exists at the time the work is done. Payment out of the Fund is only due where the fees and outlays have been "properly incurred" in connection with advice and assistance provided "in accordance with" Part II of the Act (see sections 4(2)(a) and 33). Regulations 11 and 16 of the Advice and Assistance (Scotland) Regulations 1987 support a requirement for prior authorisation because the Board may impose conditions which can only sensibly be imposed before the work is undertaken.

This case arose from a petition for judicial review by a firm of solicitors who sought payment from the Scottish Legal Aid Fund for advice and assistance they had provided to a client. The solicitors had applied to the Board for increases to the authorised expenditure limit twice; each application was granted, but in each instance some of the work was done before the Board's later authorisation was received. The auditor taxed the account excluding work done in excess of the then-authorised limit and allowed payment of a lesser sum. The solicitors obtained a favourable interlocutor at first instance, which was reversed by an Extra Division of the Court of Session; the firm then appealed to the House of Lords.

Nature of the claim: petition for judicial review seeking reduction of the auditor's taxation decision and a declarator that the solicitors were entitled to have their account taxed at the later-authorised sum (£250).

Issues framed:

• Whether fees and outlays for work done in excess of the statutory limit but later authorised by the Board are payable out of the Legal Aid Fund.
• Whether section 10 of the Legal Aid (Scotland) Act 1986 and the Advice and Assistance (Scotland) Regulations 1987 permit retrospective validation of work done before the Board's approval.
• The legal effect of the requirement in section 10 that a solicitor "shall not give" advice and assistance so as to exceed the limit except with the approval of the Board.

Court’s reasoning: The House of Lords analysed the statutory payment scheme in sections 4(2)(a) and 33 and concluded that the Fund is liable only for fees and outlays "properly incurred" in connection with advice and assistance provided "in accordance with" Part II. Section 10 contains a mandatory prohibition: where it appears that the cost is likely to exceed the limit the solicitor must determine what can be done within the limit and must not give advice and assistance so as to exceed the limit except with the Board's approval. That prohibition must be read as requiring approval in advance because the Board's power to authorise an increased limit includes power to impose conditions which can sensibly be imposed only before the work is undertaken. Regulations 11 and 16 are consistent with this construction. Accordingly work done after the limit was exceeded but before prior approval was given did not constitute advice and assistance "in accordance with" the Act for the purpose of attracting payment out of the Fund.

Appeal dismissed. The House of Lords held that section 10 of the Legal Aid (Scotland) Act 1986 must be read as a mandatory restriction: a solicitor may not provide advice and assistance that will exceed the statutory limit and claim payment from the Fund for it unless the Scottish Legal Aid Board's approval to exceed the limit exists at the time the work is done. Because the disputed work was done before prior approval had been given, it was not "in accordance with" Part II and payment from the Fund was not due.

Auditor (Sheriff Court, Edinburgh) taxed account at £222.24. Lord Ordinary (Lord Clyde) on 26 April 1990 granted decree of reduction and declarator in favour of the solicitors. Extra Division (Lords McCluskey, Morison and Kincraig) allowed reclaiming motion, recalled the interlocutor and dismissed the petition (advising on 18 January 1991). House of Lords hearing on 2 December 1991; judgment delivered 23 January 1992 ([1992] UKHL 13).