Un-recouped POA Interventions

Clawback

There are many unusual and at times uncanny terms used by the Legal Aid Agency.  A recent example is the term Unrecouped Payment on Account Intervention which has no surprises, especially as it uses the term intervention which implies a preventative measure.  For those not in the know, it’s a recent exercise being rolled across the nation designed to enable the Agency to claw back some of the payments it has made under certificates.  In practical terms it is an assessment of ‘risk’, i.e the plausibility of a provider being able to pay back what it owes.  Before we fret over the term ‘risk’, let’s go back a few steps.

A loan by any other name

A POA is typically a loan provided by the Agency to the Provider in possession of a Legal Aid Certificate.  It’s a promise by the Legal Aid Agency that they will pay up to 75% of the certificate value, to be returned when a final claim for costs has been submitted.  In an ideal world, a firm would make a POA request at various stages of a life’s case, submit a final claim for costs on conclusion and a correction of pluses and minuses would result in the balance being paid of the total claim less payments already received.  Unfortunately, a perfect world we do not live in.

In real terms

A UPOA simply means it’s a payment on account that hasn’t actually been returned yet (which reminds me I have an unrecouped wheelbarrow which I must return to the neighbours).  Like my neighbour at 313, what upsets the Agency is when there is no sight of return.

Nil assessment

In the world of lenders a POA is the equivalent of a no holds barred, credit-less check, unlimited period easy access loan all at zero percent interest.  UPOA’s have fluttered the Agency for many years, citing the post 2010 period when the LAA adopted a policy of automatically discharging certificates and assessing the value of work done under a certificate as zero.  Such nil assessment took place many years after the work on a file had concluded, including when the file in question never existed.  The effect of this draconian nil assessment was that the LAA would then seek to recoup all payments on account via monthly the bank BACS account.  Unfortunately, this procedure of ‘nil’ assessments was deemed lawful in Legal Services Commission v Loomba, Ulasi and Carter. 

Contract Manager’s role

That being said, the UPOA Intervention is not a preventative measure.  By taking back the payments on account they’ve made, the Agency are not prohibiting a claim for costs.  As with any responsible lender, an assessment of risk is imperative.  In the Agency’s case, the responsibility lies with the Supplier’s Contract Manager to ensure the firm is aware of the total amount of UPOA’s across all certificates, has the financial stability to pay back what they owe in the unfortunate event of shutting up shop the day after and most importantly is able to report back on the progress of each and every one of those cases listed.

How we can help

The latter is where a Costs Draftsman can help.  UPOA reports can total anywhere above half a million pounds, and having to pay all that back within a space of 3-6 months can have disastrous effects on cash flow.  The objective for a firm is to hold out on those recoupements until the final bill has been paid.  Costs Draftsmen, having the obvious knowledge of resolving billing issues can step in, evaluate the stage of each certificate, plan ahead in terms of progress and most importantly give reassurance to the Contract Manager that ‘something’ is being done.  There will be many surprises in the UPOA Intervention Report so don’t get caught out.  Be prepared.  Contact John M Hayes for further advice on info@johnmhayes.co.uk or telephone 0370 300 3780

Experienced legal aid costs specialist, Sadaqat Hussain is based in our Birmingham Office.