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Does anybody have any thoughts on the concept of challenging the Legal Services Commission, regarding the the rates they charge in daily interest on loans.
An initial loan of approx £15.000 for divorce costs,was charged to my property as a second charge in 1991. The loan was repaid in total in 2004, costing me a lump sum of £39.581.73.
The (LSC) run two schemes, 'the civil scheme' for funding civil cases (e.g) divorces, and 'the criminal defence service' for criminal cases.
Where you gain or keep money or property with the help of public funding through the LSC in a civil case by being legally aided. You will have to repay all of your costs out of that property. Which in my case was £50.000 from a divorce settlement towards rehousing myself and my children and therefore my asset. A charge was then put on that asset, of my costs for my legal representation during that case. This is what they call a statuatory charge. The money repaid upon redemption of that charge, then goes back into the public pot to assist others legally and covers the initial costs that were laid out in your case. Therefore, it acts as a loan for services. Usually this money is repayable immediately after a legal settlement and a solicitor must deduct all legal costs before paying out to you. However, as in my case because money was needed for re- housing my family, the charge was defered and a charge was made.
The rate of interest is set by Parliament, which at the time of my case was 5% above the bank of Englands official rate per annum simple interest (as compared to the compound interest generally charged by mortgage lenders) although this rate may go up or down each April.
Parliament has not given the Commission any power to depart from the rules set out in statute and regulations concerning the statuatory charge.
However they clearly make a packet from interest charged at a daily rate untill redemption from members of the public and im not sure whether this has ever been challenged in argument.
As in my case the initial costs incurred had more than doubled when they needed to be repaid, and that was clearly more then the costs necessary to be used in acting for me.
Hello, I totally agree with you about the exorbitant fees charged by the Legal Services Commission, as I'm presently in the process of representing my Mother in such a case. I'd really appreciate it if we could compare notes. Thank you for your time. Mark
Sorry Mark, wish I had seen this before and here am I over a year later looking in. Are you still around, what happened in your situation? Apologies for not having been able to assist when you needed help, as going it alone is something I know only too well so would gladly have lent an ear .....let me know!
Legal Services Commission
on loans.
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