Wednesday, January 8th, 2020

Scottish Legal Aid Board Liable for Interest to Solicitors Firms

This important case for solicitors firms engaged in legal aid work, holds that the Scottish Legal Aid Board (“SLAB”) are liable in interest for late payments to solicitors on the accounts that they submit. 

The pursuers are a firm of solicitors engaged primarily in legal aid work. They submitted their accounts to SLAB for payment. Although SLAB paid an amount in the interim, the solicitors took the account to taxation and were awarded an additional sum. They sought interest on the shortfall as determined by the Auditor.

SLAB argued that as there was no contract between them and the solicitor, they were not liable to make payment of interest to the solicitor under the Late Payment of Commercial Debts (Interest) Act 1998 as amended and associate EU Directives. However, Sheriff Holligan held that having regard to the purpose of the Directive (to stop late payment by large organisations to small businesses) then the relationship did not have to be a contract as generally understood. As the relationship was a “transaction leading to payment” for services, by reason of the legal aid legislation, interest was due. 

The case is of importance to all who carry out legal aid work who suffer delays in payment. Payment is required 30 days after the invoice (or account) is submitted, failing which interest at 8% over base arises by law with compensation for the costs of recovery set at a statutory amount per account or invoice. 

The pursuer firm was represented by Andrew Smith QC of Compass Chambers.

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