Martin v Legal Services Commission
| Jurisdiction | England & Wales |
| Judgment Date | 27 July 2007 |
| Neutral Citation | [2007] EWHC 1786 (Admin) |
| Docket Number | Case No: CO/5400/2006 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 27 July 2007 |
[2007] EWHC 1786 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Mr Justice Ouseley
Case No: CO/5400/2006
Mr P Engelman (instructed by Teacher Stern Selby) for the Claimant
Mr M Chamberlain (instructed by Silas Catling, Solicitor for LSC) for the Defendant
Hearing dates: 9 th July 2007
Judgement
Ouseley J:
This case involves a challenge by way of Judicial Review to the discharge of a legal aid certificate in educational negligence proceedings, shortly before trial was due to begin. It is contended by the Applicant that the discharge breached Article 6 ECHR and the Legal Services Commission's own guidance.
The Claimant is now 24. In 1998 he obtained legal aid to bring proceedings against the two local education authorities responsible for the schools at which he received primary and secondary education. The Claimant alleged negligence in the way in which they had responded to his severe dyslexia. He had left school at 16 with severe literacy problems. Proceedings were not in fact issued until 2004, when the limitation position needed to be protected.
The legal aid certificate was granted under the Legal Aid Act 1988, so that Act applies to the certificate along with the Civil Legal Aid (General) Regulations 1989 S.I. 339, rather than the replacement Access to Justice Act 1999.
The 1998 certificate covered proceedings up to the exchange of witness statements, obtaining experts' reports and counsel's opinion. The certificate was cancelled in February 2004 but was reinstated by the Funding Review Committee of the LSC in May 2004 so as to permit a review by counsel of merits and quantum. Counsel advised that there were good prospects of success against each defendant and that the quantum of damages was likely to exceed £300,000.
The claim form, particulars and prognosis report were not served until February 2005. The Claimant's solicitors set 25 May 2006 as the date for exchange of experts' reports and trial was fixed for 3 July 2006. After those dates had been fixed, the Claimant's solicitors applied on 20 April 2006 for a further extension of the costs cap so that the Claimant's expert could review and revise his report in the light of the documents then available and the witness statements. Legal aid to cover the trial had never been obtained. In May 2006 after giving due notice, the LSC discharged the legal aid certificate but it was reinstated by the Funding Review Committee so as to enable experts' reports to be exchanged, an experts' meeting to take place and a further opinion from counsel on merits and quantum to be obtained. This opinion dated 21 June 2006 was sent to the LSC on 26 June 2006.
On 27 June 2006, after considering this opinion, the LSC gave to the Claimant's solicitors Notice to Show Cause why the certificate should not be discharged and, having considered their representations, discharged it on 29 June 2006. The trial was adjourned in consequence. The Claimant appealed to the FRC, at which the Claimant was represented by counsel. It rejected the appeal in its decision letter of 16 August 2006. That is the effective decision now challenged by Judicial Review. It was accepted that the challenge to the earlier LSC decision had become academic and, subject to one point, no separate argument was addressed to it.
The Claimant challenges the FRC decision on many grounds, which I summarise as the timing of the discharge of the certificate, the lack of consideration given to the impact of discharge on the Claimant, errors of understanding of the facts and tests to be applied to the prospects of success and to the cost and benefit of proceeding, and breaches of Article 6 ECHR.
The statutory framework
Section 15(2) of the 1988 Act provides:
"(2) A person shall not be granted representation for the purposes of any proceedings unless he satisfies the Board that he has reasonable grounds for taking, defending or being a party to the proceedings.
(3) A person may be refused representation for the purposes of any proceedings if, in the particular circumstances of the case it appears to the Board ????—
unreasonable that he should be granted representation under this Part…"
These are commonly referred to as the "legal merits" test and the "reasonableness" test.
Discharge is governed by similar provisions in Regulation 77 of the 1989 Regulations which provides:
"The Area Director shall discharge a certificate from such date as he considers appropriate where, as a result of information which has come to his knowledge, he considers that—
(a) the assisted person no longer has reasonable grounds for taking, defending or being a party to the proceedings, or for continuing to do so; or…
(c) it is unreasonable in the particular circumstances that the assisted person should continue to receive legal aid."
Much of the argument related to the way in which the FRC had applied those tests and had interpreted or applied its published guidance to the Claimant's prospect of success and the likely quantum of damages. It is necessary therefore to set out parts of that guidance. The relevant "Notes for Guidance" introduced the "private client" test.
"The Board therefore applies what is known as the private client test, namely that in general legal aid will only be granted in circumstances where a client of moderate means paying privately would be advised to litigate.
…..
The notional private client being advised must be taken to be a person with adequate means to meet the probable costs of the proceedings, but not with over-abundant means, so that paying the costs would be possible, although something of a sacrifice. The private client approach is well established in practice and case law.
…..
Where a case does not satisfy the private client test, legal aid will usually be refused either on the legal merits test or the reasonableness test or both." 7–01.4–6.
Legal aid would not be granted unless there were a "reasonable prospect of success", in deciding which all questions of fact and law had to be considered; and experience, good sense and judgement had to be applied. The opinion of counsel did not have to be accepted; 7.02.3–4. The "legal merits" test would be satisfied if a claim had a better than 50 percent prospect of success; a "reasonable prospect" was 50–60 percent; "good prospects" were a 60–80 percent prospect of success; 7.02.5–6. The "reasonableness" test was an additional test and its application could lead to the refusal of legal aid for a claim which passed the "legal merits" test. It was a wide and general test encompassing all those factors which would influence a private client in his decision whether to take proceedings.
A very important component was "cost benefit" as it would be for a private client, although it was neither the sole nor necessarily the decisive test. The question was whether "the game is worth the candle". One approach according to the guidance would be to estimate costs to the conclusion of trial, estimate the damages recoverable and the prospects of successfully enforcing the order for costs; if the likely recovery was greater than the likely costs, legal aid would not be refused on cost benefit grounds alone.
7.03.7 continued:
"Sometimes costs will have been incurred before legal aid is applied for. The starting point will be to add together costs already incurred to the likely future costs of taking the action to trial for the purposes of the costs benefit assessment. However, the additional incentive of seeking to recover costs already expended might be an important consideration for the private client and therefore might justify the grant of legal aid especially if the merits are strong and the costs already incurred are substantial compared to the cost of proceeding to trial. By contrast, if the merits are not strong, it is unlikely that a grant of legal aid will be justified merely in the hope of recovering costs already expended.
…..
The Board will adopt a similar approach when considering the discharge of a certificate and will take into account costs already incurred and the prospects of recovering them, whether the costs were incurred privately or under the certificate.
…..
Solicitors and counsel should report to the Board if the cost benefit position deteriorates after the grant of legal aid. See also Iverson v. Iverson [1966] 1 All E.R. 258. The fact that substantial costs have been incurred will not, by itself, be a sufficient reason to justify the continuation of the certificate – see also NFG 12, para. 12–02.
The importance of the case to the client for example in leading to a real enhancement of the quality of life was also relevant.
The FRC before me relied on later guidance which appears to have been issued in 1999, the precise status of which was unclear. This guidance elaborated the cost benefit part of the "reasonableness" test with a matrix showing that for a case with "only reasonable prospects" (50–60 percent), the recoverable damages had to be at least twice the costs and for cases with "good" prospects (60–80 percent), at least 1.5 times costs. If those ratios were not satisfied, the assisted party would have to show that it was still reasonable to continue with the claim. The guidance recognised that a private client might continue in such circumstances e.g. if home or livelihood were at serious risk, or if another important remedy such as an injunction were sought in the action.
The Claimant contested the relevance of that later guidance because it...
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Is (by the Official Solicitor as Litigation Friend) v The Director of Legal Aid Casework (1ST Defendant) The Lord Chancellor (2ND Defendant)
...there is a discretion to be exercised on the particular circumstances of a particular case, as the Guidance makes clear. 84 In Martin v. Legal Services Commission [2007] EWHC 1786 (Admin), Ouseley J helpfully summarised the ECtHR jurisprudence. That case challenged a refusal to grant legal ......