The SRA Handbook is no longer in effect. It was replaced by the SRA Standards and Regulations on 25 November 2019.

SRA Handbook

Treatment of payments to legal aid practitioners

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Rule 19: Treatment of payments to legal aid practitioners

Payments from the Legal Services Commission

19.1

Two special dispensations apply to payments (other than regular payments) from the Legal Services Commission:

(a)

An advance payment, which may include client money, may be placed in an office account, provided the Commission instructs in writing that this may be done.

(b)

A payment for costs (interim and/or final) may be paid into an office account at a bank or building society branch (or head office) in England and Wales, regardless of whether it consists wholly of office money, or is mixed with client money in the form of:

(i)

advance payments for fees or disbursements; or

(ii)

money for unpaid professional disbursements;

provided all money for payment of disbursements is transferred to a client account (or the disbursements paid) within 14 days of receipt.

19.2

The following provisions apply to regular payments from the Legal Services Commission:

(a)

"Regular payments" (which are office money) are:

(i)

standard monthly payments paid by the Commission under the civil legal aid contracting arrangements;

(ii)

standard monthly payments paid by the Commission under the criminal legal aid contracting arrangements; and

(iii)

any other payments for work done or to be done received from the Commission under an arrangement for payments on a regular basis.

(b)

Regular payments must be paid into an office account at a bank or building society branch (or head office) in England and Wales.

(c)

You must within 28 days of submitting a report to the Commission, notifying completion of a matter, either:

(i)

pay any unpaid professional disbursement(s), or

(ii)

transfer to a client account a sum equivalent to the amount of any unpaid professional disbursement(s),

relating to that matter.

(d)

In cases where the Commission permits you to submit reports at various stages during a matter rather than only at the end of a matter, the requirement in rule 19.2(c) above applies to any unpaid professional disbursement(s) included in each report so submitted.

Payments from a third party

19.3

If the Legal Services Commission has paid any costs to you or a previously nominated firm in a matter (advice and assistance or legal help costs, advance payments or interim costs), or has paid professional disbursements direct, and costs are subsequently settled by a third party:

(a)

The entire third party payment must be paid into a client account.

(b)

A sum representing the payments made by the Commission must be retained in the client account.

(c)

Any balance belonging to you must be transferred to an office account within 14 days of your sending a report to the Commission containing details of the third party payment.

(d)

The sum retained in the client account as representing payments made by the Commission must be:

(i)

either recorded in the individual client's ledger account, and identified as the Commission's money;

(ii)

or recorded in a ledger account in the Commission's name, and identified by reference to the client or matter;

and kept in the client account until notification from the Commission that it has recouped an equivalent sum from subsequent payments due to you. The retained sum must be transferred to an office account within 14 days of notification.

19.4

Any part of a third party payment relating to unpaid professional disbursements or outstanding costs of the client's previous firm is client money, and must be kept in a client account until you pay the professional disbursement or outstanding costs.

Guidance notes

(i)

This rule deals with matters which specifically affect legal aid practitioners. It should not be read in isolation from the remainder of the rules which apply to everyone, including legal aid practitioners.

(ii)

In cases carried out under public funding certificates, firms can apply for advance payments ("Payments on Account" under the Standard Civil Contract). The Legal Services Commission has agreed that these payments may be placed in office account.

(iii)

Rule 19.1(b) deals with the specific problems of legal aid practitioners by allowing a mixed or indeterminate payment of costs (or even a payment consisting entirely of unpaid professional disbursements) to be paid into an office account, which for the purpose of rule 19.1(b) must be an account at a bank or building society. However, it is always open to you to comply with rule 17.1(a) to (c), which are the options for everyone for the receipt of costs. For regular payments, see guidance notes (v)-(vii) below.

(iv)

Firms are required by the Legal Services Commission to report promptly to the Commission on receipt of costs from a third party. It is advisable to keep a copy of the report on the file as proof of compliance with the Commission's requirements, as well as to demonstrate compliance with the rule.

(v)

Rule 19.2(c) permits a firm, which is required to transfer an amount to cover unpaid professional disbursements into a client account, to make the transfer from its own resources if the regular payments are insufficient.

(vi)

The 28 day time limit for paying, or transferring an amount to a client account for, unpaid professional disbursements is for the purposes of these rules only. An earlier deadline may be imposed by contract with the Commission or with counsel, agents or experts. On the other hand, you may have agreed to pay later than 28 days from the submission of the report notifying completion of a matter, in which case rule 19.2(c) will require a transfer of the appropriate amount to a client account (but not payment) within 28 days.

(vii)

For the appropriate accounting records for regular payments, see rule 29.7.