LSC comes to audit
The Legal Services Commission requires its contracted lawyers to bind experts into contractual terms that allow the LSC to come and audit the experts' work
A recent call to the UK Register of Expert Witnesses helpline raised the question of the Legal Services Commission’s (LSC) right to audit the work of expert witnesses. The expert was being asked to agree contractual terms that required him, where his fee was to exceed £250, to keep detailed records of work done and to allow the LSC to audit his work. This was the first time we had heard of such terms being sought by a lawyer.
We spoke to Glyn Hardy, at the Commissioning & Operational Policy Department of the LSC. He told us:
“The Legal Services Commission (LSC) is committed to both meeting the needs
of clients and delivering improved value for money for the taxpayer. We therefore use a variety of measures to ensure that costs incurred on a case, including the costs of Approved Third Parties, are both reasonable and proportionate. Approved Third Parties are those who provide non-legal work
ancillary to contract work, and therefore include experts and translators,
but not agents or counsel.
“One such measure can be found in clause 3.7 of the 2010 Standard Contract
Standard Terms which stipulates (subject to Clause 3.8 that covers the situation where an Approved Third Party is already working with the client at
the point of instruction) that all agreements a Provider makes with Approved Third Parties in connection with Contract Work, where the fees payable
by the Provider exceed £250, must require the Approved Third Party to
keep accurate records of the time they spend on the work they have been instructed to do, and of the work done.
“The Standard Terms also allow the LSC to specify criteria for Approved Third Parties who may be instructed, requiring that they must possess such experience, qualifications, or be members of such panel, or hold such accreditation as the LSC may specify in the Contract and may from time to time specify Approved Third Parties who may not be appointed. The LSC may also conduct an audit of their work. This may be conducted where, for example, the value of the claim for the Approved Third Party's work is unusually high.”
So, if you undertake instructions for lawyers working under contract to the LSC, you ought to be seeing requests to include these record-keeping and audit provisions in the contract between yourself and the lawyer. Since the cost of complying with an audit will often not be trivial, it would seem prudent for experts to add to their contract an indemnity provision, something like:
The (solicitor) indemnifies and will hold indemnified Approved Third Parties in respect of audit costs incurred by Approved Third Parties as a result of any audit undertaken by the Legal Services Commission in this matter.
Incidentally, the current troubles over the LSC 2010 contract don't touch on this because the provisions have been in place since 2007.