Rai & Co gets rich on refugees

Law Society acts on solicitors creaming legal aid millions off asylum misery.

AN EXPENSIVE P-reg Mercedes sits outside the home of Rai Sivakadacham in Wembley, Middlesex. Other than the security camera, it is the only ostentatious sign of the vast amount of money the law firms he runs with his wife have made in the last year from legal aid.

On the face of it, his main firm, Rai & Co, is a small practice operating out of a shop front in Willesden High Road, north London. In 1998 the couple's income from asylum cases rocketed to pounds 500,000, fuelled by hundreds of Rai & Co dealings with refugees from the Kosovan civil war.

Mr Sivakadacham's wife, Gowri, set up her own firm at the same address last August. But on Tuesday both firms were shut by the Law Society after complaints about their handling of asylum cases. The previous night a Channel 4 News report had revealed claims of poor work by Rai & Co.

Over the past year, official concern has grown about the spiralling cost of legal aid for immigration work. In 1998 legal aid costs for asylum cases rose to pounds 50m, almost double the cost in 1996. Last December the Legal Aid Board targeted 76 practices where legal aid claims for asylum cases had dramatically increased.

No one is suggesting this is a case of just the odd rotten apple, but rather that there is extensive fraud and malpractice. The Legal Aid Board is still investigating 50 firms.

The Independent on Sunday has the names of half-a-dozen key companies all based in north London and notorious in immigration circles. The allegations vary, but the key claim is that some practices have turned their asylum- seeking work into a production line that does little to help the clients, but enables the firms to milk the legal aid scheme.

Solicitors are paid around pounds 45.50 an hour for up to two hours' advice and assistance. They can claim up to pounds 79.50 an hour and expenses for preparation work in appeals and judicial reviews.

The "immigration racket" has been fuelled by representatives of the firms, often refugees themselves, touting for business at ports and railway stations, directing newly arrived refugees to their solicitors. This contravenes Law Society rules.

Some solicitors pay these representatives pounds 30 to pounds 80 for each client they introduce, or poach from other practices. This, too, breaks Law Society rules.

A researcher posing as an Albanian interpreter went to the head office of Kothala & Co in west London, which specialises in immigration cases. The principal, Mr C Kothalawala, agreed, in a taped conversation, to pay a pounds 30 introduction fee for each Albanian/Kosovan client. He said: "I can give the pounds 30 if you bring the three clients." The researcher said: "No, for three clients would be pounds 90, not pounds 30". Mr Kothalawala replied: "Three clients will [be] 90, that's right."

Confronted about the conversation, Mr Kothalawala denied he was offering a fee and claimed the pounds 30 sums were advances on the interpreter's legal aid fee.

Some lawyers are also said to have advised Albanian refugees to claim they are from Kosovo and have been beaten by Serb police. Albanians are often deported but Kosovans stay.

Other solicitors are also involved with the illegal "underground railroad", smuggling refugees across Europe from Kosovo, Albania and other countries to Britain for pounds 2,000 each.

Last year, after a lorryload of refugees was dropped at Todington Services on the M1, representatives of a law firm were on the scene within minutes to advise the new arrivals.

Reputable solicitors are deeply concerned about the damage the rackets are doing to the profession. Ruth Bundey, chair of the Law Society's Immigration Law Sub Committee, said her committee had concluded "that there is now a deep-seated and very serious problem of manifestly poor and/or incompetent service, unscrupulous practice and professional misconduct (including the defrauding and abuse of the Legal Aid scheme) on the part of a substantial proportion of those solicitors undertaking immigration and asylum work".

The Legal Aid Board is also reporting to the Lord Chancellor on standards of service provided to asylum-seekers

Mr Sivakadacham, a Tamil in his late 30s, has been in Britain for years, and qualified as a solicitor in July 1995. Rai & Co was set up in August 1996 with offices in Willesden High Road and Turnpike Lane. His new wife, Gowri, qualified the same year and joined as a partner.

Rai & Co had been a small player in the immigration field, but it increased legal aid income for immigration work from a few thousand pounds in 1997 to a remarkable pounds 500,000 in the first nine months of 1998, putting them in the top 15 of practices in this legal aid work. They were averaging pounds 1,100 a client in legal aid claims.

According to a leaked internal document, the Law Society first became aware of problems with Rai & Co last August, when the Home Office Asylum Screening Unit at Croydon complained about legal firms, in particular Rai & Co.

The unit had been overwhelmed by clients of Rai & Co and several other small firms. Each client was accompanied by a firm representative who sometimes acted for several clients at a time.

Rai & Co were said to be bringing up to 100 clients a week, straining the unit's resources. On 17 August 1998 the unit was forced to restrict each firm to 30 clients per week. Mr Sivakadacham complained to the Law Society that this "considerably hampers our ability to effectively deal with our clients' instructions".

Two days later, his wife Gowri set up a new firm called Gowri & Co, based at the Rai & Co office in Willesden. Then, asylum case work previously done by Rai & Co was handled by other small companies run by people who had been partners or associated with Rai & Co.

The unit also received complaints from other solicitors' practices after Rai & Co representatives approached their reps, believing them to be refugees, and told them, wrongly, they had to have legal representation at the ASU.

Mr and Mrs Sivakadacham were not available to answer questions at their home.