Uncertainty mounted over the future of family legal aid contracts this week, as solicitors await a decision by the Legal Services Commission on whether it will appeal a High Court ruling that its tender process was unlawful.

Some firms that did win contracts in the tender round are planning to sue the commission if it does not successfully appeal.

The news comes after LSC chief executive Carolyn Downs admitted last week that she expects the commission’s accounts to be qualified by the National Audit Office (NAO) for the second year running, and blamed the presence of auditors for difficulties in processing payments to solicitors.

Two weeks after the Law Society’s successful judicial review of the family tender process, the LSC had still to decide whether to appeal as the Gazette went to press. It must decide within 14 days of the written judgment, which was expected on Wed­nesday this week.

The Law Society will meet the LSC next week to seek clarification on the extension of current contracts, the timetable for re-tendering and the issue of compensation for firms that expanded as a consequence of the contracts offered.

High-profile solicitor Rodney Warren, founder of Eastbourne firm Rodney Warren & Co and director of the Criminal Law Solicitors Association, told the Gazette that his firm is among a number that will sue the LSC if the commission does not honour the contract it offered under the tender process.

Warren said firms would seek compensation both for the amount they spent preparing to deliver the new contracts and the loss of profit they would have made from the matter starts they were awarded.

An LSC spokesman said no liability for compensation arises, because the contract awards were made in good faith without knowledge of any challenge to the way the tender was run. He said the LSC had sympathy with those firms that were successful and had taken steps to expand, but said it was the inevitable consequence of the Law Society’s challenge that all provisional awards have been set aside.

Meanwhile, Downs told the Legal Aid Practitioners Group conference last week that she expected the LSC’s accounts to be qualified for the second year running. Explaining the current backlog of payments to firms, Downs said the LSC was being ‘comprehensively audited’ by the NAO, with auditors in the office every day for the last three months. She said this had made it impossible to process all payments as quickly as in the past, although 90% were being made within 30 days.

  • Update

The LSC has announced that all non-family legal aid contracts and family mediation contracts will start on 15 November 2010. It also announced that all current ‘family only’ and ‘family with housing’ contracts will be extended until 15 December 2010. The quashing order issued two weeks ago by the High Court means that the LSC cannot proceed with awarding these contracts to providers who were successful in the recent tender.

The LSC is still waiting for the written judgment of the Law Society’s judicial review. In the meantime, it has said that it will meet representative bodies over the next fortnight to discuss longer-term options for ‘family only’ and ‘family with housing’ contracts.

LSC chief executive Carolyn Downs said: ‘Our overwhelming priority is to give providers and, above all, legal aid clients certainty that access to justice will be maintained. We also want to continue to encourage dialogue with representative bodies to minimise any disruption.’