Legal Aid in Mortgage Cases
Summary of Mailshot Issued by Scottish Legal Aid Board, January 2010
Eligibility for Advice & Assistance and Civil Legal Aid
The eligibility criteria are the same as for other categories of case.
SLAB claim they grant Civil Legal Aid in 80% of cases where an owner occupier applies for it.
They also say they do not require third party supporting statements for Civil Legal Aid applications owing to the sensitive nature of the subject matter.
Personal Financial Contributions Payable by Clients
Initial Contributions
Initial personal contrubutions are the same as for other categories of case both for A&A and for Civil Legal Aid. Renfrewshire Law Centre may waive an A&A contribution but cannot waive a Civil Legal Aid Contribution, which is payable directly to SLAB.
Clawback
Advice & Assistance
If the matter is resolved under A&A before legal proceedings are raised and the client succeeds in retaining occupancy of his home, then SLAB will not treat this as preserving an asset and pay the A&A account.
Unfortunately, the SLAB mailshot uses the expression 'before legal proceedings are raised', which is ambiguous and confusing, i.e. does 'legal proceedings' refer to the lenders' Writ or to the client's application under the Mortgage Rights (S) Act ? By far the vast majority of owner occupiers only consult a solicitor after their lenders have served a Writ, so if the expression refers to the Writ, then SLAB's foregoing concession in terms of paying A&A accounts is of extremely limited applicability. Moreover, the mailshot does not say what happens to A&A accounts if the matter is only resolved after legal proceedings are raised.
However, if the matter results in the sale of the client's home, then SLAB may treat this a recovery on the client's part and refuse to pay the A&A account (subject to a possible hardship application).
Civil Legal Aid
If the matter is resolved under Civil Legal Aid, court proceedings having been raised, and the client succeeds in retaining occupancy of his home, then SLAB may treat this as preserving an asset and apply 'clawback', i.e. they may expect the client to pay up to their entire legal bill (not simply the initial contribution). SLAB say 'for clawback to apply, the market value of the property must exceed the outstanding mortgage, including arrears and charges'. In other words, clawback applies if there is equity in the property. In some cases SLAB could clawback the entire remaining equity.
However, SLAB will not necessarily demand immediate payment. They may accept payment by installments or a standard security (effectively another form of mortgage).
SLAB say the average clawback is about £400.
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