Legal Aid body fails to recover overpayments to commissioners

Royal Courts of Justice Crest

Royal Courts of Justice Crest

A government watchdog which publishes a Legal Aid `league table’ of Northern Ireland’s highest earning lawyers, has itself been criticised after it failed to hand back nearly £30,000 it had overpaid to its own commissioners.

The Northern Ireland Legal Services Commission (NILSC) has been criticised by barristers and lawyers over its decision to publish a league table of those who receive the highest payments of legal aid.

Justice Minister David Ford then caused further uproar among the legal profession after announcing his intention to slash the existing £100m legal aid bill by £25m over the next four years.

Lawyers warn that the swingeing cuts mean they will be unable to properly defend clients in court.

Defence teams have already withdrawn from dozens of cases involving legal aid, with the dispute threatening to bring Northern Ireland’s courts to a virtual standstill in the very near future.

However NILSC has been criticised for leaving itself open to claims of double standards after an investigation by the Detail revealed that it has failed to pay back £27,033 in overpayments to commissioners, nearly four years after first being censured by then Lord Chancellor Lord Falconer, who called for the return of any payments which could not be justified.

Among the commissioners who were overpaid were current Parades Commission chairman Peter Osborne (£4,379); Big Lottery (NI) chairman Frank Hewitt (£4,613); former Consumer Council Director Maeve Bell (£10,608); former Equality Commission’s Legal Services Direct Jennifer Greenfield (£3,547) and former Northern Ireland Agricultural Producers Association (NIAPA) chairman Miceal McCoy (£3,886.43).

There is no suggestion that any of those involved acted in any way improperly.

However four years later no commissioner has been asked to hand back any of the overpayments.

When the Legal Services Commission was first established in April 2003 to take over the administration of publicly-funded legal services from the Law Society part of its statutory obligation was to ensure “best value for money”.

However in March 2007 Lord Falconer, who was the government’s most senior legal authority, ruled that NILSC had been wrong to make a series of irregular payments to its commissioners without his prior approval.

The payments stemmed from the Legal Service Commission’s decision in June 2004 to change the structure of payments it made to its commissioners, from a daily to an annual rate.

However NILSC had failed to obtain any prior approval from the Lord Chancellor.

In November 2005 and July 2006 NILSC sought on two separate occasions to obtain retrospective approval from the Lord Chancellor for the payments.

However in March 2007 Lord Falconer officially rejected the request to rubberstamp the overpayments and directed NILSC to take appropriate steps to pursue recovery from any commissioner who had received payment, but had not worked the minimum required five days per month.

In 2009 the government’s Comptroller/Auditor General TJ Burr, who has responsibility for auditing NILSC accounts, highlighted concerns that commissioners may have actually been overpaid by more than £38,000.

“The NILSC has calculated that, based on the evidence available, overpayments were made to four commissioners totalling approximately £20,000 in 2004/05, and to five commissioners in 2005/06 totalling approximately £18,000 with the possibility of a further smaller amount in 2006/07,’’ he said.

“Since the arrangements had not been approved by the Lord Chancellor in accordance with the legislative requirements, commissioners’ remuneration which was overpaid as a result is irregular.

“I have therefore qualified my audit opinion in respect of this irregularity.”

In 2007 Northern Ireland Court Service (NICS) director David Lavery wrote to the Legal Service Commission’s then chairman Tony Holland to inform him that Lord Falconer had ruled against the overpayments to commissioners.

“The Lord Chancellor has concluded that if he had been invited in June 2004 to approve remuneration arrangements for commissioners based on a salary of five days per month he would have been unable to agree to this proposal in the absence of evidence to support this change,’’ he said.

Mr Lavery said that an analysis of accounts provided by NILSC’s chief executive in July 2006 had failed to "support payment for five days per month.”

The Legal Services Commission chairman was advised that Lord Falconer would take no action against any commissioner who could be shown to have worked the required five days per month.

“If, however, the chief executive’s further analysis indicates that individual commissioners contributed less than five days per month for which they have been paid, the Lord Chancellor has directed that the chief executive should take appropriate steps to pursue recovery of any over-payments,” he said.

“It will be for the chief executive to determine whether recovery after this time is practicable.”

Following a review of NILSC’s accounts it was determined that five commissioners had been overpaid by £27,033.

However four years later no commissioner has been asked to hand back any of the overpayments.

Raising concerns about NILSC’s failure to repay tens of thousands of pounds of taxpayers’ money back to the exchequer, Law Society of Northern Ireland President Brian Speers said:

“Taxpayers’ money must be spent wisely and transparently to provide quality services for the public.

“It is the responsibility of those entrusted with public funds to put in place proper and adequate checks and controls to ensure that this happens.”

Bar Council chairman Adrian Colton QC, whose association represents Northern Ireland’s 600 barristers, also raised concerns over the Legal Service Commission’s failure to repay the public money.

“The difficulties which have arisen as a result of this issue demonstrate the need to put in place transparent and practical systems to deal with public fundings,” he said.

“The unintended consequences which have arisen in this situation underline the need for good governance to ensure that both the public and those who work within the system have confidence in that system.”

However in a statement to the Detail, an NILSC spokeswoman defended the decision not to recoup the public funding from the overpaid commissioners, stating:

“The commission after careful consideration concluded that, as the problem arose from a misunderstanding about the basis on which commissioners would be paid, the individuals had accepted the payments in good faith and had been told that there was no requirement to maintain detailed records, that recovery of the sums was not practicable.

“The total sum has been written off with the concurrence of the then sponsor body, the Northern Ireland Court Service.”

The NILSC spokeswoman insisted that the initial decision to overpay commissioners had been the result of a “misunderstanding”.

“The situation arose because of a misunderstanding about the basis on which commissioners would be remunerated.

“In 2004, the then chair of the commission advised commissioners that a change to their remuneration arrangements from a daily fee basis had been agreed and that remuneration would be based on a salary based on an average time commitment of five days per month.

“This change had not in fact been approved by the Lord Chancellor.’’

The overpayments gaffe follows a damning report in 2009 which found that NILSC was structurally and managerially “not fit for purpose”.

Management was also criticised for not providing “balanced leadership”.

The Landscape Review report, which had been commissioned by the Northern Ireland Court Service, described the commission’s corporate planning process as being “characterised by delays and poor process”.

“We have not seen evidence of a (top management team) which is operating effectively as a corporate entity providing balanced leadership to the organisation, although we do note that the full complement of senior management has never been in place and that there have been unhelpful changes in personnel during the short period since the commission was established.

“These points lead us to conclude that the senior management team as currently configured and resourced is not likely to be capable of discharging the commission’s duties effectively in a devolved environment, ie an environment which is likely to place even greater challenges on the executive leadership within the organisation.

“This applies equally to the capacity to implement the findings of the Landscape Review."

Further concerns were raised that NILSC had failed to produce any audited accounts of its first six years in office.

Those accounts were not finally published until late 2010.

NILSC insisted that it had taken steps to address the concerns highlighted by the report.

However, in July 2010 another internal audit review identified the need for an “increased level of board involvement” to address the deficiencies highlighted by the Landscape Review report.

Each of the five named commissioners were invited to comment on the overpayments issue but none availed of the opportunity.