The Parliamentary Ombudsman is to investigate complaints of maladministration made against the Legal Services Commission by the Law Society and several law firms over its late claims to recoup payments made on account.

In 2008, the LSC demanded that legal aid firms repay money that had been paid to them on account, where they had not accounted for work done.

Many of the claims related to matters over six years old, where solicitors had closed, archived or destroyed their files, with some dating back to the 1980s. Claims have also been made against individual solicitors who had retired and sold or closed their firms.

The Law Society questioned the accuracy of some of the demands and said it was not right that responsible firms, which had destroyed old records, had been left with no way of responding to the LSC’s claims.

In May 2008, Chancery Lane complained to the ombudsman, suggesting that the tardiness of the LSC’s actions amounted to maladministration. The ombudsman initially indicated that the complaint may not be within its remit, but has now accepted it for formal investigation.

A LSC spokesman said the commission had made continuous improvements to the way unrecouped payments on account are handled and has recouped £151m of the £180m of unrecouped payments identified in 2005. It said it agreed an approach to older cases with the Law Society in 2008.