THE SCOTTISH LEGAL AID BOARD GUIDANCE ON VERIFICATION OF FINANCIAL ELIGIBILTY FOR ADVICE AND ASSISTANCE/ABWOR CIVIL AND CHILDREN S CASES 1. INTRODUCTION Solicitors are only allowed to provide Advice and Assistance if they have satisfied themselves that the client is eligible under the provisions of the Act and Regulations. The client s disposable income and disposable capital must be within the limits set by the Regulations in order to be financially eligible. In assessing the client s disposable income and disposable capital the solicitor is required by the Regulations to have regard to guidance provided by the Board. The Scottish Government has produced new regulations to make the requirements in civil and children s advice and assistance consistent with the position in criminal advice and assistance with regard to the need to obtain documentary evidence of eligibility and for payment to be withheld in cases where the statutory tests have not been met. This guidance is intended to provide practitioners with information about how to avoid the risk of non-payment for work they have undertaken. It is important as far as possible, and as further explained below, that work is not commenced until the solicitor has obtained documentary evidence of the applicant s financial eligibility. This will reduce unnecessary subsequent for work for all parties and will remove the risk of non-payment. The requirements in summary are: you must assess a client s financial eligibility except in the limited cases where the financial test does not apply; clients who have no income must still be asked about any disposable capital; you must get financial verification in the form of documentary evidence of income and capital, where this is necessary and practicable; As far as possible, you should obtain verification of financial circumstances before starting to work for the client. Where this is not immediately practicable, the client must be asked to provide this as soon as possible, and sign a mandate allowing you to obtain verification directly from the employer, benefits agency, bank etc should this not materialise. For clients receiving passported benefits (income support, income-based jobseeker s allowance, and income-based employment and support allowance) we will check they are in receipt of these benefits and have an electronic link with the Department for Work and Pensions (DWP) to do so (we do however need the client s National Insurance number, benefit claimed and date of birth to allow us to do this check if any of these elements are incorrect or not supplied we will be unable to perform this check). We need similar details for the spouse or partner if 1
they are claiming the benefit; You should keep the evidence of financial eligibility on file. You cannot charge for any time or work involved in getting this information, assessing financial eligibility or writing for verification. We will not be able to pay accounts for work done where solicitors have not met the statutory tests. The new regulations apply to all cases where advice and assistance is made available on or after 31 January 2011. For applications by children where any person owes an obligation of aliment to the child under section 1 (1) (c) or (d) of the Family Law (Scotland) Act 1985, evidence of eligibility of that person must also be obtained unless the solicitor has established that it would be unjust or inequitable to treat that person s resources as the child s resources. The Advice and Assistance (Scotland) Amendment Regulations 2010, in force from 31 January 2011, introduce the requirement in civil and children s cases for a solicitor admitting an applicant to advice and assistance to: (a) so far as necessary and practicable, obtain from that person financial or other documentation; and (b) take such other reasonable steps as are necessary. This makes it clear that the solicitor is obliged to obtain financial or other documentation for the purpose of ascertaining the capital and income of the applicant. These regulations also introduced for civil and children s advice and assistance cases the power for the Board to withhold payment from the Fund or if payment has been made to recover it if payment is unjustified by reason of inadequate assessment or verification of any relevant factor. This guidance has been prepared by the Board after consultation with solicitors representative organisations and individual practitioners and sets out approaches consistent with existing good practices already in place in many firms. We identified the existing best practices set out in this guidance in discussions with and on visits to practitioners and representative bodies, such as the Family Law Association and we consulted widely. The guidance on verification of financial eligibility is also consistent with the approaches adopted by the legal aid authorities in other jurisdictions in the UK and beyond. The guidance is not intended to act as a barrier to access to justice nor to penalise practitioners who have acted and proceeded in good faith and we have, as a result of our consultations with practitioners and the Society, attempted to identify the difficulties that practitioners may encounter in certain circumstances or types of cases and to set out how such situations should be addressed. We welcome comments on any such areas that practitioners believe we have not yet addressed. 2
The regulations also require the resources of any person who owes an obligation of aliment to a child to be taken into account when assessing the child s eligibility for advice and assistance in relation to non-criminal matters unless the application of this provision would produce an unjust or inequitable result in the circumstances. 2. Necessary and practicable The qualification in the regulations that verification should be obtained so far as necessary and practicable clearly suggests that there are some cases where the obligation to obtain financial or other documentation does not apply. We have set out below what necessary and practicable means. Necessary Necessary means when the regulations require financial eligibility to be assessed, so it will be necessary to obtain verification in every case except those where the regulations exempt the need for financial assessment. Those cases are: Mental health ABWOR applications (category MENO) Hague convention applications (category HAG) Reciprocal enforcement applications (category RENF) Warrants for detention or further detention under the Terrorism Act 2000 (category TERF) Obstructive witness order applications (category OBWI). In addition to these specifically exempted categories of work, Article 5 (c) of Schedule 2 to the Advice and Assistance (Scotland) Regulations 1996 allows the income of a spouse or partner to be disregarded when there is a contrary interest, when the parties are living separate and apart or where it would be inequitable or impractical in the circumstances of the case to do so. Clearly if any of these three criteria can be established it is not necessary to assess the spouse s /partner s finances and consequently it is also not necessary to obtain verification of the spouse s/partner s income and capital. The solicitor must, however, be able to explain on what basis it would be inequitable or impractical. Necessary does not extend to a subjective decision by the solicitor that it is unnecessary to obtain verification, for example because he/she has known the client for a long time or because he/she considers there to be no reason to doubt the client. Practicable There may be cases where the relevant financial or other documentation does not exist or cannot immediately or safely be accessed, for example when the client has had to flee the home in a case of domestic violence, and in such cases we accept that the documentation may not be available, at least initially. We comment further on this in section 9 of this guidance. It is the responsibility of the solicitor to demonstrate why it is impracticable to obtain the financial and other documentation. 3
However, even if it is not practicable for the solicitor to obtain financial and other documentation, he/she is still obliged by the regulations to take such other reasonable steps as are necessary to establish the client s financial eligibility. Such other reasonable steps include, but are not limited to, using the mandate attached to this guidance to allow the solicitor to obtain information from third parties, such as employers, banks and benefits agencies. It is important to note that failure to obtain financial and other documentation to verify the financial eligibility (relating to both income and capital) of applicants when it is necessary and practicable to do so or to have taken other reasonable steps will result in non-payment from the Fund or recovery of amounts paid. Unjust or inequitable It is for the solicitor to establish that it would be unjust or inequitable to treat the resources of any person owing an obligation of aliment to the child as the child s resources. The regulations do not define unjust or inequitable, but we believe that examples would be cases where the person has a contrary interest in the case or where a non-resident parent has refused to co-operate in the provision of information. 3. General position The general position is that documentary evidence of financial eligibility should be obtained as early as possible, preferably at the initial meeting unless there is real urgency, and retained on file. Solicitors should encourage clients to bring the required documentation with them to first appointments, and many firms build such arrangements into their administrative procedures for making appointments. If clients forget or fail to bring documents such as bank statements, our discussions with practitioners and banks showed that alternative documents can be obtained quickly and at no cost. For example, ATM mini-statements may show sufficient information to allow you to be satisfied as to eligibility. If clients do not have bank statements or they do not cover the appropriate 7 day period then most banks will immediately provide at the counter free of charge a balance/transaction screen print on request for a specified period of time at no charge. This should not be confused with a request for a duplicate statement, where banks may well charge. Solicitors are not able to charge for any time or work involved in obtaining information about financial eligibility, assessing financial eligibility or for the cost of writing for any verification. Up to date information about eligibility limits is available in the Keycard which is available at our website www.slab.org.uk. Solicitors should obtain a signed mandate from the applicant allowing enquiries to be made of third parties such as employers, benefits providers and banks and should use this to obtain any necessary documentary evidence not supplied by the applicant. We 4
have attached a mandate to this guidance which can be used for this purpose. The solicitor should not, however, start to act until he is satisfied as to eligibility. The great majority of meetings with clients in civil and children s cases are by appointment, and our discussions with the profession have shown that those firms most likely to obtain supporting documentation are those with procedures in place and consistently applied that include an explanation to the client when the appointment is made about what documentation is required and that it should be brought to the first meeting. Practitioners will be familiar with similar requirements relating to money laundering whereby they are required to obtain similar documentation before proceeding to act for a client. If a client fails to bring the requested documentation to the first meeting but the solicitor is nonetheless satisfied as to their financial eligibility, for example because of a long-standing solicitor/client relationship, and decides to admit the client to Advice and Assistance, it is important that there are clear and well-applied procedures in place for following-up any undertaking to produce the required documentation at any later date or meeting, because we may not pay if the client fails to produce the documentation. 4. THE CLIENT S RESPONSIBILITIES It is important that clients are made aware of their responsibilities. Their entitlement to publicly-funded legal assistance is not unqualified. It is subject to their meeting certain criteria, and the obligation rests with them to evidence that that they do indeed meet the criteria, in the same way that they have to in order to access other public services, such as the acquisition of benefits, a passport or a driving licence. 5. CAPITAL: CHECK IT FIRST EVEN IF CLIENT IS IN RECEIPT OF PASSPORTED BENEFIT We recommend that you establish the client s capital position first, as it can sometimes be easier to do (for example by simple examination of a bank statement) and because it allows the opportunity to address any misunderstandings about eligibility. If the client does not have or forgets to bring their bank statement, as noted above they may alternatively be able to obtain an ATM mini-statement or balance/transaction screen-print. At the date of drafting this guidance (January 2011), if the client s capital exceeds 1,664 1, they are ineligible for advice and assistance, regardless of the level of their disposable income unless the disregard for applicants of pensionable age applies. The keycard, which is available in our website www.slab.org.uk provides details of current eligibility levels. They are also ineligible even if they are in receipt of a passported benefit. This point is important to note as many applicants, and some solicitors, have mistakenly thought that the receipt of a passported benefit in itself demonstrates that the client is financially eligible for advice and assistance. 1 The version of this guidance issued on 28 January 2011 contained the previous 2009-10 figure of 1639. We apologise for any inconvenience. The current Keycard for 2010-11 contains the correct figure of 1664. 5
It is possible to hold capital very significantly in excess of 1,664 2, in some cases up to 16,000 (again as at January 2011) can be held and the client can still qualify for a range of benefits, including passported benefits, so it should never be assumed that an applicant is financially eligible because they receive a passported or any other benefit. Indeed, up to 6,000 can be held with no effect on entitlement to any of the passported benefits, any excess between 6,001 and 16,000 affecting not eligibility for the benefit but the amount paid. 6. CAPITAL: DOCUMENTARY EVIDENCE The best evidence of capital held in the form of bank deposits or savings accounts is sight of a statement or passbook, whilst for shares or other savings/investments you should see any available certificates or statements. You should not be satisfied only by the production of a bank statement. You should specifically ask whether the applicant has other forms of capital, such as savings or investments accounts, and if they do you should see evidence of those. Capital is not limited just to money held in a bank or building society account. It includes items such as: all land and buildings the client or their partner own, other than the client s main home, including interests in timeshares. money in the bank, building society, post office, premium bonds, national savings certificates etc. investments, stocks and shares insurance policies that can be encashed the value of other non-essential possessions, such as a boat, a caravan, second car, jewellery (but not wedding or engagement rings), antiques or items bought for investment money owed to the client or their partner money due from the will of someone who has died money due from a trust fund money that can be borrowed against business assets redundancy payments. We accept that if a client says that they do not have any of the above then it is difficult for you to obtain evidence of that negative position. If you can obtain any such evidence, you should retain it in file, but you should be able to show that you have asked about each of these items. We have attached a declaration to this guidance that you may find helpful to this process. 7. INCOME Income is likely to come from one of three sources: 2 As above. 6
Employment Self-employment Benefits (either passported or non-passported) You may also encounter applicants who declare no income. It is important that such applicants are asked to explain on what basis they support themselves. For all of the above, including those declaring no income, good information about income and outgoings can be obtained from bank statements, so it is always advisable to ask the applicant to bring their statement. If an applicant claims to have no bank account you should decide if this is likely and reasonable and record on what basis you accepted the position. You may be satisfied from the information seen on a bank statement that the applicant is eligible for Advice and Assistance, but we have set out details below of the types of documentation you may wish to see as an alternative to or in addition to a bank statement : Employed applicants The latest bank statement and is the best evidence, but you may also be satisfied if you were to see alternative documentation such a wage slip, a recent letter of appointment that confirmed the salary, other correspondence from an employer or a very recent P60. Self-employed applicants Business accounts, bank statements (personal and business) or recent audited accounts are helpful in evidencing income, but in the absence of these the onus is on the applicant to demonstrate his income to your satisfaction. The amount and quality of documentation available may depend on how long and to what extent the business has been trading. We do not expect you to undertake detailed analysis of accounts, but we do expect you to have seen bank accounts to show the sort of income and capital being taken from the business and to have formed a view as to financial eligibility or to have seen an accountant s projection of such matters if that is available. Benefits Benefits are paid directly into bank or post office accounts, so bank statements are once again a good source of information and verification. Alternatively you may be able to see the most recent award letter or other correspondence from the Benefits Agency. The next section of this guidance explains the direct link we have with the Benefits Agency with regard to verification of passported benefits. income When an applicant declares no income, you should still, take steps to verify this. You need to obtain adequate, verifiable information about how they live in the absence of any income. For example, if they claim to be supported by a family member, you need to know who that person is to be able to check that. You should ask to see a bank 7
statement in all cases to ensure that there is indeed no income or capital. If the applicant claims to have no such account, and you are satisfied, you should record this. If the applicant is a young person living with their parents you may either ask for confirmation of that from the parents or form a judgement that the age and circumstances of the applicant make this likely to be true. For older applicants you should ask and record how they support themselves in the absence of any income and form a view as to whether this is credible. You should record the basis for your decision. 8. Verification of passported benefits It remains your responsibility to satisfy yourself that the applicant is financially eligible. However, we now have a direct link with the Department for Work and Pensions, which allows us to check cases where the client is receiving passport benefits that is, income support, income-based jobseeker s allowance, and the new income-related employment support allowance. Where a client tells you they receive one of these benefits, we will be able to confirm this via the link and to inform you promptly of any information to the contrary from DWP records, but you must provide the client s national insurance number and date of birth on the form to allow us to do this. You must also provide this information in respect of any spouse or partner via whom the benefit is paid. If the link is unable to confirm that the applicant is in receipt of the benefit they claimed to be in receipt of, we will treat the income status as not yet having been verified and will contact you and your client for further information. 9. Cases where no documentary evidence of eligibility is immediately available Although the general position is that you should not act until you have verified your client s capital and income by seeing documentary evidence, there are a small number of circumstances in which we accept that it may not be possible, at least in the early stages of the case, to obtain such documentary evidence. For example, this may be where your client has had to flee the family home because of domestic violence and is unable to access their records, or they may be in some form of custody or detention, for example in a matter related to immigration or asylum. You should explain this position on the application for A&A/ABWOR or for an Increase, but generally we would not expect you to do more than two hours of work until you have seen documentary evidence of financial eligibility. This limit is intended to reduce the element of risk to the solicitor of non-payment. There may also be difficulties in obtaining documentary evidence from applicants with literacy or mental health issues and/or chaotic lifestyles, but in even these cases you should seek documentary evidence and if it is not obtainable clearly explain to us on what basis you have admitted the client to A&A/ABWOR. However, in even some of these situations the inability to produce documentary evidence may be only temporary and you should continue as the case progresses to 8
seek the appropriate documentary evidence and continue at each application for an increase to explain why it is not reasonably possible to obtain documentary evidence of financial eligibility. In such cases if you have provided us with adequate information during the case and acted diligently and in good faith on the circumstances of the case and the information provided by your client and it later transpires that the client is ineligible, we will honour the increases that we granted and assess and pay your account accordingly, but would seek repayment from your client. 10. Verification in prisoner s cases Practitioners should bear in mind that the resources of spouses and partners have to be taken into account when assessing financial eligibility except where the opponent has a contrary interest, the parties are living separate and apart, or in all the circumstances of the case it would be inequitable or impractical to do so. The parties are not living separate and apart for the purposes of assessment of financial eligibility solely on the basis that the applicant is in prison. For the parties to be living separate and apart and the spouse or partner s financial resources to be disregarded the marriage or relationship must be at an end. You need, therefore, in prisoner cases to satisfy yourself as to the spouse or partner s financial resources and to obtain the verification described in this guidance unless one of the three exceptions set out in the previous paragraph apply. 11. Age of documentary evidence What is to be established is the financial position of the applicant in the seven days prior to being admitted to A&A/ABWOR. Ideally, therefore the documentation concerned should specifically cover that period of time, but we accept that this will not always be possible for a number of reasons. For example, many wage-slips and bank statements are only issued once per month, and benefit awards/confirmatory letters may only be issued annually. You should complement the obtaining of documentation in such cases with judicious questions of the applicant to ensure that there have been no changes since the date of the document, such as a substantial change to the balance shown on a bank statement. You should retain a note of any such questions asked and the responses provided that satisfied you as to the client s financial eligibility and you should make use of the mandate allowing you to make enquiries of third parties when necessary. The most recent documentation as is practically possible should be obtained at the time of admitting the client to A&A/ABWOR, which may satisfy you initially and allow you, as the case progresses, to obtain the next wage-slip or statement that is issued. You could then use the additional, up to date information to re-assess eligibility and if necessary to recalculate any contribution payable by the applicant. 9
LIST OF REASONABLE EXPLANATIONS FOR LACK OF AVAILABILITY OF VERIFICATION OF FINANCIAL ELIGIBILITY Explanation given Destitute Appearance Asylum seeker Believes client Child/Schoolchild Asked client to bring in Detained in hospital Housewife Immigrant In Custody Serving a sentence Category code = MENO Category code = MENO and ABWOR is selected bank account evidence available Previous client Prisoner Client has signed declaration Looks trustworthy Existing client Applicant has had to flee home due to domestic violence Benefits verified by SLAB D.S.S. mandate signed Bank and Benefit mandate signed Is this a reasonable explanation?, however where the applicant is being detained this should be made clear to us and this will then be accepted. Yes for Income for Capital, however where the applicant is being detained in hospital long term this should be made clear to us and this will then be accepted. Yes Yes Consider age under 18 Yes, over NO. Initially yes, however evidence is required and we do expect evidence to be provided before the account is submitted for payment or an explanation as to why this is still not available? - whilst we will undertake a check of passport benefits with the Department of Work and Pensions if all the necessary applicant s information has been provided, you still require to satisfy yourself that your client receives this benefit. 10
CAPITAL DECLARATION ON VERIFICATION OF FINANCIAL ELIGIBILITY FOR CIVIL/CHILDREN S ADVICE AND ASSISTANCE AND ABWOR AND CLIENT MANDATE FORM Disposable Capital Capital means savings and anything else of value the client and their partner, if appropriate own, excluding their main residence. Furniture and clothing, and the value of any tools or equipment they need for work. For verification of capital, we recommend that you see a bank statement or pass book or any certificates for any shares, or other savings and/or investments. Examples of capital include: money in the bank, building society, post office, premium bonds, national savings certificates; investments (shares and bonds etc); the amount that can be borrowed against all land and buildings owned, other than the client s main home, including interests in timeshares; money that can be borrowed against insurance policies; the value of other non-essential possessions such as boats, caravans, second cars, jewellery (excluding wedding or engagement rings), or antiques etc; money owed to the client or their partner; money due from a will or trust fund; money that can be borrowed against business assets; redundancy payments. I confirm that I do not possess any of the above or similar items which could be considered as capital. Signed.. Date Client Mandate where it is not practicable to see verification of income or capital at the outset Clients who are arranging appointments by telephone should always be asked to bring verification of income and savings. However, in situations where it is appropriate to act for clients without seeing verification when it is in the interests of not just the client, but also the wider justice system, the client must be advised of the need to provide verification as soon as possible. The client must sign the following mandate before being admitted to advice and assistance or ABWOR, and be advised that you may make enquiries with their employer, bank, DWP, or HMRC to obtain evidence of income or capital, if the client has not provided this or if you believe further verification is necessary. I agree to my solicitor contacting other people or bodies about my financial circumstances to verify my eligibility for legal assistance. If I do not provide evidence of my income or capital when requested by my solicitor after being admitted to legal assistance, or if my solicitor requires further verification, I understand that my solicitor will contact my employer, my bank, the DWP or HMRC, as appropriate. I authorise these other people or bodies to provide the information that my solicitor needs to verify my eligibility for legal assistance. Signed.. Date 11