Andrew Smith Q.c. V. S.l.a.b.

JurisdictionScotland
CourtCourt of Session
JudgeLord Menzies
Neutral Citation[2011] CSOH 168
Docket NumberCA34/11
Published date14 October 2011
Date14 October 2011

OUTER HOUSE, COURT OF SESSION

[2011] CSOH NUMBER 168

CA34/11

OPINION OF LORD MENZIES

in the cause

ANDREW SMITH QC

Pursuer;

against

THE SCOTTISH LEGAL AID BOARD

Defenders:

________________

Pursuer: R Smith Q.C., Pugh; Balfour & Manson LLP

Defenders: Mure Q.C., Barne; Scottish Legal Aid Board

14 October 2011

Introduction

[1] The matter in dispute in the present action is the date from which interest may become payable by the defenders in respect of fees of advocates who are instructed on behalf of a litigant who is in receipt of civil legal aid.

[2] The pursuer is a practising advocate. He accepted instructions from a firm of solicitors to represent the interests of a litigant who had been granted civil legal aid in respect of a clinical negligence claim. Following the commencement of proof, instructions were given by the litigant that the action should be abandoned. No award of expenses was made in favour of the litigant, and fees in respect of the pursuer's instruction became payable by the defenders.

[3] Unlike in criminal legal aid cases in which an advocate's note of fee is submitted directly to the defenders, in civil legal aid cases a fee note is submitted by Faculty Services Limited ("FSL") on behalf of the advocate to the instructing solicitor. Each fee note is headed "Fee Notification (Proposed Fee)", and carries a note in the following terms:

"NB. Responsibility to recover fees in legally aided cases lies with the instructing Solicitor. Failure to include said fee(s) in the account to The Scottish Legal Aid Board will result in payment being due by the instructing Solicitor."

[4] In this action the pursuer seeks payment of interest in respect of three notes of fee. Parties were agreed when the matter came before me at debate that this opinion should address issues of legal principle, rather than the specifics of the claim which can be addressed at a later stage in the proceedings (if necessary). It is convenient for present purposes to confine the narrative to the first fee note on which the action is founded, being fee note no. 8. This was dated 25 November 2005, and related to work performed by the pursuer between 3 October and 3 November 2005. The fee note was issued by FSL to the pursuer's instructing solicitors. On 31 January 2006 FSL submitted to the defenders an application for payment on account of fees in accordance with Regulation 11 of the Civil Legal Aid (Scotland) (Fees) Regulations 1989. This stated that the period covered by the claim was from 3 October to 3 November 2005 in respect of the legally aided litigant in question. It gave the pursuer's name and stated that the fees earned during this period, excluding VAT, amounted to £7,500, and that 75% thereof was claimed in accordance with Regulation 11, being £5,625. The form concluded with a claim and certificate in the following terms:

"We claim a payment to account of fees in the amount entered in box A1 or B1 above. We certify that to the best of our knowledge and belief the information given in this claim is correct and we confirm that this claim is in accordance with regulation 11 of the Legal Aid (Scotland) (Fees) Regulations 1989."

This certificate was signed on behalf of FSL.

[5] The Regulation 11 application was received by the defenders on 1 February 2006, and on 3 March 2006 the defenders paid a total of £260 plus VAT in respect of this application for payment on account of fees.

[6] On 22 January 2008 the solicitors who had instructed the pursuer in this litigation submitted to the defenders their account of expenses in respect of the action in question. This was received by the defenders on 23 January 2008. The account synopsis included details of fees claimed by several counsel in respect of work performed in relation to the litigation, including the pursuer's fees. In February 2008 the defenders paid an abated sum in respect of the pursuer's fees, under deduction of the amount already paid in respect of the Regulation 11 application. On 4 February 2011 the defenders paid the balance of the fees claimed by the pursuer.

[7] At the outset of the present proceedings, each party adopted a rather more radical position than that ultimately argued before me at debate. The pursuer initially maintained the position that he was entitled to interest on each fee note from a date thirty days after the date on which the fee note was received by the instructing solicitors. For their part the defenders maintained the position that no interest was due in respect of any fee until such time as they had carried out a full assessment of the fees and work carried out and had satisfied themselves that the fees had been properly incurred or had been taxed by the auditor.

[8] By the time the matter came before me for debate the parties had shifted their positions somewhat. The pursuer's primary position was that interest became payable on the full amount of the fee indicated in the Regulation 11 application (ie, in relation to fee note 8, £7,500) thirty days after the submission of that application. His secondary position was that interest was payable on the sum which was 75% of the fees and which should have been paid in response to the Regulation 11 application (ie, for fee note 8, £5,625), from a date thirty days after the receipt of the Regulation 11 application. His final position was that interest was payable on all counsel's fees on a date thirty days after the submission of the instructing solicitor's account to the defenders. For their part, the defenders accepted the last point, but disputed that any interest was payable for any period before thirty days after the submission of the solicitor's account.

[9] Each senior counsel helpfully provided me with skeleton submissions (nos. 19 and 22 of process) which I have taken into account but which I do not rehearse in full here. In addition, a Joint Minute of Admissions for the parties (no. 23 of process) was lodged for the debate, in which a wide range of evidential matters was the subject of agreement. Not all issues of fact had been capable of agreement between the parties; in particular, the defenders have raised issues about the conduct of the pursuer in the context of an argument for remission of statutory interest in terms of section 5 of the Late Payment of Commercial Debts (Interest) Act 1998. Parties were agreed that I should not address issues of conduct, nor remission of statutory interest, at this stage, but rather that I should confine this opinion to the question of the date from which interest should run. It is to that issue that this opinion is confined. Both parties were agreed that shortly after the issuing of this opinion, the case should be put By Order to enable further procedure to be considered.

The relevant statutory and regulatory framework

[10] Although this is not an exhaustive list, the following provisions were referred to in the course of submissions:

Legal Aid (Scotland) Act 1986 ("the 1986 Act")

"Section 2 - Powers of the Board

(1) Subject to the provisions of this Act, the Board may do anything-

(a) which it considers necessary or expedient for securing the provision of legal aid and of advice and assistance in accordance with this Act; or

(b) which is calculated to facilitate or is incidental to or conducive to the discharge of its functions.

Section 4 - Scottish Legal Aid Fund

(1) The Board shall establish and maintain a fund to be known as the Scottish Legal Aid Fund (in this Act referred to as "the Fund").

(2) There shall be paid out of the Fund-

(a) such sums as are, by virtue of this Act or any regulations made thereunder, due out of the Fund to any solicitor or counsel in respect of fees and outlays properly incurred, in connection with the provision, in accordance with this Act, of legal aid or advice and assistance;

Section 33 - Fees and outlays of solicitors and counsel

(1) ... any solicitor or counsel who acts for any person by providing legal aid or advice and assistance under this Act shall be paid out of the Fund in accordance with section 4(2)(a) of this Act in respect of any fees or outlays properly incurred by him in so acting."

The Civil Legal Aid (Scotland) (Fees) Regulations 1989 (as amended) ("the 1989 Regulations")

"Fees allowable to counsel

9. Subject to the provisions of regulation 10 regarding calculation of fees, counsel may be allowed such fees as are reasonable for conducting the proceedings in a proper manner, as between solicitor and client, third party paying.

Payments to account

11. (1) A solicitor acting for, or counsel instructed on behalf of, a person receiving civil legal aid may prior to the completion of the proceedings for which the legal aid was granted submit a claim to the Board, in such form and complying with such terms and containing such information as the Board may require for assessment purposes, for payment of sums to account of his fees necessarily and reasonably incurred in connection with these proceedings.

(2) A claim may be made under this Regulation only in relation to any case where-

(a) in the proceedings for which the civil legal aid was granted the number of days on which a diet of proof, debate or like hearing is held exceeds 20 days; or

(b) a period of 2 years has elapsed since the date on which the Board gave notice in writing of the grant of civil legal aid.

(3) A second or subsequent claim may be made under this Regulation-

(a) where the number of days on which a diet of proof, debate or like hearing is held exceeds 20 days in any period subsequent to that covered by the immediately preceding claim; or

(b) where the period mentioned in paragraph (2)(b) has elapsed, after an interval of not less than 12 months has elapsed since the immediately preceding claim was made.

(4) The amount of any payment in respect of a claim under this Regulation shall be 75 per cent of the fees that will become eligible for payment and earned during the period covered by the...

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