R (Law Society) v Legal Services Commission
| Jurisdiction | England & Wales |
| Judgment Date | 29 November 2007 |
| Neutral Citation | [2007] EWCA Civ 1264 |
| Docket Number | Case No: C1/2007/2013, 2007/2055 & 2007/2056 |
| Court | Court of Appeal (Civil Division) |
| Date | 29 November 2007 |
[2007] EWCA Civ 1264
The Lord Chief Justice
Lord Justice Wall and
Lord Justice Lawrence Collins
Case No: C1/2007/2013, 2007/2055 & 2007/2056
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MR JUSTICE BEATSON
CO/3268/2007 & HQ07X01529
Mr John Howell QC, Mr Javan Herberg and Mr Mark Vinall (instructed by Bircham Dyson Bell LLP) for
The Law Society and Dexter Montague & Partners
Robert Jay QC, Paul Darling QC, Rhodri Williams and Sarah Hannaford (instructed by Legal Services Commission and the Treasury Solicitor) for the
Legal Services Commission, the Lord Chancellor and the Secretary of State for Justice
Hearing dates: October 15 & 16, 2007
Judgement
Lord Phillips of Worth Matravers CJ:
I Introduction
This is the judgment of the court, to which all of its members have contributed.
Provisions in the new Unified Contract between the Legal Services Commission (“the LSC”) and solicitors wishing to undertake publicly funded work contain extensive powers of unilateral amendment on the part of the LSC. This appeal concerns the compatibility of those provisions with general principles of public procurement law and with Council Directive 2004/18/EC on the coordination of procedures for the award of public works contracts, public supply contracts and public services contracts (“the Public Sector Directive”) and United Kingdom regulations dealing with public sector procurement, the Public Contract Regulations 2006 (“the 2006 Regulations”).
On 27 July 2007, Beatson J, sitting in the Administrative Court of the Queen's Bench Division in proceedings for judicial review brought by the Law Society against the LSC, in which the Lord Chancellor and Secretary of State for Justice (“the Secretary of State”) was an interested party, made a declaration that the rights of the LSC to amend the Unified Contract referred to in clause 13.1 of that Contract (other than amendments permitted under clause 13.2) were incompatible with Regulations 9(2), 9(4) and 9(7) of the 2006 Regulations insofar as they were applicable to technical specifications (as defined in Regulation 9(1) of those Regulations).
He refused to make a similar declaration in the Law Society's favour in relation to Regulation 4(3) of the 2006 Regulations. He gave the Law Society permission to appeal against that refusal, and at the same time gave both the LSC and the Secretary of State permission to cross-appeal against the declaration made in favour of the Law Society.
Concurrently with the Law Society's application for judicial review, a firm of solicitors, Messrs Dexter Montague & Partners (“Dexter Montague”) had brought proceedings against the LSC in the Queen's Bench Division for damages for breach of the LSC's obligations under the 2006 Regulations in relation to the Unified Contract. Dexter Montague is based in Reading and, until it refused to sign the Unified Contract, handled about a thousand publicly funded civil cases per annum.
These proceedings were pleaded and advanced on identical grounds to the claim advanced by the Law Society, with the consequence that on 5 June 2007, by consent, the Master of the Crown Office ordered that there be a split trial of Dexter Montague's claim, and that the question of liability only be referred to the Administrative Court to be determined at the same time as the judicial review proceedings brought by the Law Society.
Accordingly, and consistently with the declaration which he made in favour of the Law Society, in the Dexter Montague proceedings Beatson J. gave limited judgment on liability to like effect in its favour. He directed that the two consequential issues which arose in those proceedings (namely whether or not the publicly funded work undertaken by Dexter Montague would have reached the threshold required to subject it to the Regulations, and if so whether or not Dexter Montague had suffered any loss or damage) be heard separately. He also gave Dexter Montague permission to appeal against his refusal of relief under Regulation 4(3).
This court is concerned with only one, but important, aspect of the Unified Contract, namely whether or not the powers of amendment given under it to the LSC satisfy the transparency provisions of the 2006 Regulations. The appeals and the cross appeal do not embrace any wider considerations of the Unified Contract, which is a substantial document, running to some 96 pages with a further 123 pages (Part D) of specifications and rules covering all aspects of civil work. Nor do they concern certain matters decided by Beatson J which are not the subject of these appeals, namely that (a) the Unified Contract is not a public services concession (which would have put it outside the scope of the 2006 Regulations); (b) there has been no delay in the proceedings for judicial review; and (c) the Law Society has standing.
It should thus be made clear at the outset of this judgment that it is limited in its scope to a consideration of the one issue identified above. In particular, this court was not invited to rule on any other aspect of the Unified Contract, or on the changes introduced by the Secretary of State and the LSC to the system for public funding of legal services.
II Background
Beatson J summarised the origin and role of the LSC in the following way (paragraphs 6 to 11 of the judgment), which we adopt:
6. The LSC is a statutory corporation established under Part 1 of the Access to Justice Act 1999 (“the 1999 Act”). Section 1(2) of the 1999 Act confers powers and imposes duties on the LSC in relation to the Community Legal Service (the “CLS”) and the Criminal Defence Service (the “CDS”).
7. The Community Legal Service was established by the 1999 Act to promote the availability to individuals of specified legal services and securing within available resources and priorities that individuals have access to services that effectively meet their needs: section 4(1) of the 1999 Act. By section 4(4) those exercising any function relating to the CLS are required to have regard to the desirability of doing so, so far as is reasonably practicable so as to (a) promote improvements in the range and quality of services provided, (b) secure services that are appropriate having regard to the nature and importance of the matter, and (c) secure the swift and fair resolution of disputes without unnecessary or unduly protracted proceedings in court.
8. Section 4(5) requires the LSC to fund the specified services and section 5(1) requires it to establish and maintain a fund known as the Community Legal Service Fund. By section 5(7), in funding services as part of the CLS, the LSC “shall aim to obtain the best possible value for money”. Funding priorities are set by the LSC in accordance with directions given by the Lord Chancellor and taking into account the need for the specified services. Section 6(3)(a) of the 1999 Act empowers the LSC to fund services by “entering into contracts with persons or bodies for the provision of services by them”.
9. By section 10 (1) of the 1999 Act a person for whom services are funded by the LSC as part of the Community Legal Service “shall not be required to make any payment in respect of the services except where regulations otherwise provide”. The Community Legal Service (Financial) Regulations 2000 (SI 2000 No. 516) as amended by SI 2007 No. 906 make provision for the assessment of the financial resources of individuals in order to determine eligibility to receive funded services and to assess any contribution to be made. Contributions in respect of the costs of any services provided are to be paid to the LSC unless it has delegated that function under contract or the funding code. Section 22(2) of the 1999 Act provides that a person who provides services funded by the LSC as part of the CLS or the CDS “shall not take any payment in respect of the services apart from (a) that made by way of that funding, and (b) any authorised by the Commission to be taken”.
10. In January 2000, acting under its powers pursuant to section 6(3)(a) of the 1999 Act, the LSC started to contract for the provision of legal services. From the outset the contracts contained provisions empowering the LSC unilaterally to amend the contracts. The former General Civil Contracts, which expired on 31 March 2007, contained such a power. The LSC does not purchase a specified amount of services by means of the contracts. The contracts permit the solicitors and not for profit organisations who have obtained the requisite quality standard, and agree to abide by the terms of the contract, to undertake legal aid work.
11. In relation to legal advice, known as controlled work, the permission to undertake legal aid work is subject to a maximum number of new cases (called “matter starts”). In relation to certificated representation before the courts there is no maximum. Initially there was a single legal aid quality standard, the “SQM”. In a “bid round” in 2004 the LSC introduced additional criteria concerning quality and access for new civil contracts. In her statement Ms Wayte says that “when contracting commenced … the sole requirement was that the provider needed to demonstrate compliance with the SQM....
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