How much will it cost? - Statutory charge

What is the Statutory Charge?
The statutory charge is what the Legal Services Commission call the full amount of your legal costs that are incurred under your public funding certificate (Family Help Higher/Legal Representation), and possibly under Legal Help and Family Help (Lower) also in dealing with your matter when a public funding certificate was issued.

If you do not have a certificate of public funding, the statutory charge will not be applicable. However, the solicitor’s charge may arise.

If you previously instructed other solicitors in the same ongoing matter, their costs will also be included.

How do I know whether the Statutory Charge will become payable?
The statutory charge will normally become payable if you have a certificate of public funding and you have recovered a financial settlement or if you have preserved property. This is however a decision which will be taken by the Legal Services Commission.

Preserved property means that you will either have had the property transferred into your sole name, or that you are to have the use of the property until the youngest child reaches a certain age (this will be set out in a Court order).

It is unlikely that the statutory charge will arise in any Children Act Proceedings, unless the public funding certificate covers both financial matters and children matters, in which case, all the costs incurred under both proceedings would become repayable.

How can I pay the Statutory Charge?
There are several ways of paying the statutory charge:

1. You can pay the charge in full;
2. You can agree with the Legal Services Commission to repay the statutory charge by instalments;
3. You can elect to postpone the repayment of the charge (provided the Legal Services Commission agrees to it). However, they will place a charge against your property so that you only pay the charge when the property is sold. You must bear in mind, however, that with putting a charge against the property, interest will accrue on the total amount outstanding (currently interest runs at 8% per annum). Interest will accrue until the charge is settled in full. The Legal Services Commission will also insist on putting a charge on your property if you pay by instalment until the full payment is made.

You will be asked to sign an ADMIN1 form if you wish to have a charge placed against the property. The Legal Services Commission will make arrangements to register the charge on your property.

An independent financial adviser may be able to advise you whether it would be cheaper to obtain a loan to pay off the statutory charge.

How will I know the amount of the Statutory Charge?
Once your matter is finished, we will apply to the Legal Services Commission to discharge your certificate of public funding and we will send your whole file to our costs draftsman, who will prepare either a CLAIM1 or bill of costs. This will give the exact figures of the costs incurred under your public funding certificate.

If I paid a Contribution, what happens to those Contributions?
Any contributions you pay towards legal costs, will be banked by the Legal Services Commission and interest will accrue on all contributions paid.

If the statutory charge applies in your case, your contributions and the interest accrued will be offset against the statutory charge. Depending on the amount of the statutory charge, you may be entitled to a refund of part of your contributions and the interest accrued on that refunded amount.

The Legal Services Commission will forward a cheque, made payable to you, to this firm after they have paid my firm’s costs. We will forward the cheque to you.

If the statutory charge does not apply in your case, your contributions and interest accrued on them will be paid into the public fund. You will not be entitled to receive a refund of contributions or interest accrued.

If you have any questions or need any further advice, please do not hesitate to contact us and we will do our best to accommodate you.