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Spot check audits on claims for commercial agent fees and conduct money

Between February and May 2014 the Professional Practices Branch of Legal Aid NSW has carried out spot check audits of 82 panel lawyers and 539 claims for commercial agent fees and/or conduct money across all panels. To date, almost $34,000 has been requested in refunds.

Claims are submitted and paid electronically but lawyers are required to retain invoices or receipts for all disbursements for which payment has been claimed from Legal Aid NSW. The main reason for the refunds was that receipts or other evidence to substantiate the claims for commercial agent fees and/or conduct money were not retained by the lawyer as required by point 9 of the Terms and Conditions of Use of Grants Online.

Audited panel lawyers were asked to provide copies of invoices issued by the entity which received payment for commercial agent fees and/or conduct money. Where these were not provided by the respective entity, panel lawyers were asked to provide copies of other supporting evidence such as a receipt, a copy of the cheque sent by the lawyer, a cheque butt with details of payment, and/or the covering letter the panel lawyer sent enclosing payment.

Refunds were requested if the lawyer did not provide the required evidence to substantiate the payment.

Other audit findings included:

  • One in seven claims did not comply with any one or more of the following:
  • 36 panel lawyers were unable to substantiate one or more of their claims for commercial agent fees and/or conduct money. As a result requests for refunds totaling almost $34,000 inc GST have been issued to date
  • A follow up audit on claims for commercial agent fees and conduct money will be conducted for some panel lawyers who have previously been audited.

The four main non compliances were:

  • (1) Claim against the incorrect line item – NO GST
    Some pro forma invoices (such as for conduct money) contain two line items – one adds GST to the claim and the other does not. Private lawyers should use the "WITH GST' line item.
  • (2) Claim against incorrect work itemLawyers must ensure that all claims for fees submitted to Legal Aid NSW are accurate. Fees and disbursements must be claimed in accordance with any applicable Legal Aid NSW scale of fees and claims may only be made for the purpose specified in the grant of legal aid.

    The audit found that in some instances the work items of commercial agent fees and conduct money were incorrectly claimed to pay for fees incurred in instructing a solicitor agent.

    Where a solicitor agent is retained the fee for that agent should be paid from the lump sum grant already available to the assigned lawyer. This is because the solicitor agent is undertaking the work that otherwise would have been carried out by the assigned lawyer. In a complex matter an additional grant for a solicitor agent may be made (if sought) which is to cover the additional cost of instructing that agent.
  • (3) Insufficient evidence to support claims
    Receipts or other evidence for all disbursements for which payment has been claimed from Legal Aid NSW must be retained by the lawyer on their file. If these are not provided during an audit, a refund will be sought.
  • (4) Claims made before work invoice date
    Fees may only be claimed after the work covered by the claim has been completed

main non-compliance pie chart

Panel lawyer audits are a regular part of our business process and they support the streamlined processes that are available via Grants Online. Audit updates and news will appear regularly in Legal Aid News.

Panel lawyers are reminded where insufficient evidence is found to substantiate claims, refunds will be sought and further action may be considered.