Legal Services Commission v Henthorn

Under regulation 100(8) of the Civil Legal Aid (General) Regulations 1989, a cause of action to recover the balance of payments made on account accrues when the relevant costs assessment is completed. A demand is required before the balance can be enforced, but does not determine when time begins to run.

An unexpired statutory claim will amount to an abuse because of delay only on wholly exceptional facts. Once the court has assessed and certified the costs, the Legal Services Commission may rely on that certificate, including a nil allowance for counsel’s fees, unless and until it is amended.

The Legal Services Commission sought to recover payments made on account to a barrister under civil legal aid certificates. The payments concerned work performed between 1992 and 1998. The Commission’s remaining claim was for £80,470.23 in relation to 11 cases.

His Honour Judge Anthony Thornton QC dismissed the proceedings, holding that the six-year limitation period under section 9 of the Limitation Act 1980 began when the work authorised by each certificate was completed: [2010] EWHC 3329 (QB). He also accepted a defence based on abuse of process or public law unreasonableness.

The central issue on the Commission’s appeal was whether a claim under regulation 100(8) of the Civil Legal Aid (General) Regulations 1989 accrued upon completion of the work, upon assessment of the costs, or only when repayment was demanded.

1. Appeal allowed unanimously. Regulation 100(8) of the Civil Legal Aid (General) Regulations 1989 created the right to recover the balance of payments made on account. Time under section 9 of the Limitation Act 1980 began when the relevant costs assessment was completed, not when the work under the certificate was completed and not when the Commission later demanded payment. Assessment was the earliest point at which the final costs and the direction and amount of the balance were established.

2. The words “on demand” required the Commission to demand repayment before enforcing its accrued right. They did not confer control over the commencement of the limitation period. Clear language would ordinarily be needed before a creditor could determine when time began merely by choosing when to make a demand.

3. The result was consistent with the self-contained legal-aid scheme. Counsel receiving money on account was on notice that the final balance would be struck only after assessment. Any practical difficulty caused by a solicitor’s failure to initiate assessment did not justify departing from the regulation’s natural meaning. The authorities concerning claims which existed before a procedural notice, certificate or quantification were materially different.

4. A statutory claim brought within its limitation period will constitute an abuse merely because of delay only on wholly exceptional facts. No promise or clear indication that the claims had been abandoned was alleged. Nor was the making of the demands irrational: the barrister knew or ought to have known that the payments were provisional, and the Commission had done nothing to induce an assumption that repayment would not be sought.

5. The Commission could rely on the court’s assessment certificate as establishing the final costs, even where counsel’s fees were entered as nil. Any failure by the solicitors to include counsel’s fees or comply with regulation 112 did not invalidate the certificate as against the Commission. The certificate remained effective unless and until amended.

6. The Commission’s application to adduce further evidence was refused because the documents could, with reasonable diligence, have been obtained before trial. The precise sum for which judgment should be entered was left for written submissions if the parties could not agree it.

1. Court of Appeal (Civil Division): By [2011] EWCA Civ 1415, unanimously allowed the Commission’s appeal. The precise monetary judgment was left for agreement or further written submissions.

2. High Court, Queen’s Bench Division: His Honour Judge Anthony Thornton QC dismissed the proceedings, holding that limitation ran from completion of the work and accepting an abuse or public law defence: [2010] EWHC 3329 (QB).