Millions frittered away after legal aid blunders
Cash milked by rogue lawyers – or just given out by mistake
MILLIONS of pounds of taxpayers’ money have been wrongly spent on legal aid, the Daily Mail can reveal today.
Huge sums of public cash have been siphoned off by dodgy lawyers and their clients.
And the quango which controls legal aid payments wasted up to £20million on unjustified handouts last year, according to its own estimates.
We can disclose for the first time that one law firm was paid an astonishing £793,000 in error, and went bust before the mistake was found 18 months later.
Another law firm is being investigated for fraud after concocting spurious legal aid claims totalling nearly £100,000.
A total of just under £1.6million in fraudulent activity has been uncovered by the Legal Aid Agency (LAA) anti-corruption unit in the last two years.
Aside from criminal activities, the LAA calculated that last year it handed more than £14million of taxpayers’ money to law firms which should not have been paid out, and wrote off a staggering £6million in bad debts by firms.
The cash paid to firms was later found to be invalid – but it was too late to claw the money back. Last night one MP said it raised ‘serious questions’ about how the £ 1.76billion annual legal aid budget is spent.
‘Urgent action should be taken to ensure that hardworking taxpayers’ money is being properly spent,’ said Natalie Elphicke, the Conservative MP for Dover.
‘This raises serious questions about the management of the legal aid budget.’ The £6million written off by the LAA in 2019-20 was up from £1,649,000 in the previous 12 months – an increase of 269 per cent.
Sources said this was due to the LAA reviewing ‘ historic debts where recovery is no longer possible’. Cases could include ones in which people who have wrongly received legal aid have moved address, died or cannot be traced through credit reference agencies.
It included £793,000 paid in error to a law firm in May 2018 – a mistake that was not picked up until January this year.
But when the LAA tried to claw back the cash, it found the law firm had gone into liquidation.
The LAA said it was ‘taking steps to recover’ the money.
The Government’s spending watchdog, the National Audit Office, uncovered further multimillion pound errors.
It estimated the amount of taxpayers’ money incorrectly handed to law firms last year climbed to £14.5million, up from £11million the year before.
In some casese cases, law firms may have submitted incorrect claims about the cases they were seeking taxpayer funding to bring, known as ‘misreporting’.
In other cases, applicants had failed to disclose relevant information about their finances, and in others there were ‘assessment or process errors’ by the LAA or legal aid providers. Fraud uncovered by the LAA included £94,402 paid to one law firm – which cannot be named for legal reasons. The £94,000 was recovered by fraud investigators and a criminal investigation is underway.
‘Misreporting’ is defined by the LAA as ‘calculation errors, inputting errors or accepting insufficiently detailed invoices’ as well as ‘using out of date payment rates or incorrectly calculating the frequency of income receipts’.
Other mistakes might involve sending in a bill for an ‘incorrect number of pages of evidence,’ sources said.
In some cases, applicants may have made errors in declaring their income or expenditure.
The LAA’s annual report noted: ‘ The complexity of legal aid means there is an inherent risk of error because of incorrect eligibility assessments or inaccurate payments.’
The LAA oversees all taxpayerfunded cases in England and Wales and spent £1.76billion in 2019- 20. A Legal Aid Agency spokesman said: ‘We take the recovery of debts seriously and have a dedicated taskforce set up to tackle fraud.’
David Spencer of the Centre for Crime Prevention said: ‘Enough is enough. It is time for the Ministry of Justice to conduct an urgent review of the entire legal aid machinery and introduce the many changes that are much needed and long overdue.’
‘Inherent risk of error’
AN infallible way for ministers to stir up a hornets’ nest is to suggest cutting the bloated £1.7billion-a-year legal aid budget.
Only by placing fingers firmly in ears can one drown out the indignant howls of lawyers desperate to defend their paydays.
Every fibre screams with revulsion when terrorists and killers receive huge sums to fight cases, while the victims of heinous crimes are told to raid their savings.
But a cornerstone of democracy is the right of defendants to have representation in court. What we cannot tolerate, though, is the misuse of millions of pounds of taxpayers’ cash by the Legal Aid Agency.
In one appalling instance, the quango mistakenly handed £790,000 to a law firm which then went bust, rendering the money unrecoverable. In another, penpushers shovelled cheques to dodgy solicitors.
A review into this fiefdom is long overdue. For while it haemorrhages public funds, calls will grow for its wings to be clipped.