R (on the application of Ben Hoare Bell Solicitors) v Lord Chancellor

JurisdictionEngland & Wales
CourtQueen's Bench Division (Administrative Court)
JudgeLord Justice Beatson
Judgment Date03 March 2015
Neutral Citation[2015] EWHC 523 (Admin)
Docket NumberCase No: CO/2770/2014
Date03 March 2015

[2015] EWHC 523 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMINISTRATIVE COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Beatson

Mr Justice Ouseley

Case No: CO/2770/2014

The Queen on the application of:

Between:
(1) Ben Hoare Bell Solicitors
(2) Deighton Pierce Glynn Solicitors
(3) Mackintosh Law
(4) Public Law Solicitors
(5) Shelter
Claimants
and
The Lord Chancellor
Defendant

Martin Westgate QC and Martha Spurrier (instructed by Public Law Project) for the Claimants

James Eadie QC and Richard O'Brien (instructed by The Treasury Solicitor) for the Defendant

Hearing dates: 16 and 17 December 2014

Lord Justice Beatson
1

This is the judgment of the court to which we have both contributed.

I. Introduction

2

The claimants are four firms of solicitors who provide legal services in public law areas and a charity providing advice, support and services to homeless and badly housed people in England. Following a tendering exercise in 2010, they were awarded contracts to provide legally aided persons with services in a range of public law contexts, involving many kinds of judicial review. We refer to such persons and bodies as "providers". The defendant is the Lord Chancellor. He has a duty under section 1 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 ("LASPO") to secure that legal aid is made available in accordance with Part 1 of the Act and he is now effectively the other party to the claimants' contracts. 1 The Director of Legal Aid Casework is the civil servant in the Legal Aid Agency ("the LAA") designated by the Lord Chancellor to have statutory responsibility for making independent decisions about eligibility for legal aid in individual cases. The Director is responsible, subject to the directions and guidance of the Lord Chancellor, for administering the legal aid scheme. 2

3

In this judicial review, filed on 13 June 2014, the claimants challenge the legality of an amendment to the legal aid scheme made by the Civil Legal Aid (Remuneration) (Amendment)(No 3) Regulations 2014 SI 2014 No 607 ("the Remuneration Amendment Regulations") which came into force on 22 April 2014. The question is the legality of the introduction by the Remuneration Amendment Regulations of what can broadly be described as a "no permission, no fee" arrangement for making a legally aided application for judicial review. There is also no entitlement to payment where permission has neither been granted nor refused, for example where the claim has been settled or withdrawn, but in such cases the amendment gives the Lord Chancellor power to pay the costs of making the application where he considers that it is reasonable to do so. This discretionary power is in practice exercised by or on behalf of the Legal Aid Agency. 3 Services in investigating the prospects of a claim are excluded and will be remunerated. The regulation challenged is set out at [14] below.

4

In grounds 1 and 2 of the challenge, the claimants maintain that there is no power to make entitlement to payment for the provision of properly assessed qualifying legal services dependent on the outcome of a case because LASPO does not contemplate that where substantial legal services under the scheme established by it are properly provided they will be provided without payment. They also maintain (in ground 3) that the effect of the amendment is likely to have a "chilling effect" on access to the High Court in the sense that providers who risk not being paid will apply criteria that are stricter than those in LASPO and the regulations made under it. Accordingly, they are likely not to take up judicial review cases which are meritorious but not

straightforward and, as a result, the Lord Chancellor will be in breach of his statutory duty to secure that legal aid services are made available to persons who qualify. The evidence in support of the claimants' case consists of 23 statements by 18 witnesses and the exhibits to them. There are statements of members of the claimant solicitors' firms, of the Chief Executive of Shelter, and of members of other solicitors' firms. There are also statements of members of other organisations including the Coram Children's Legal Centre, the Howard League for Penal Reform, and Medical Justice. The names of those who have made statements and of their firms and organisations are set out in Appendix 1 to this judgment.
5

The Lord Chancellor's case is that the legislation entitles him to place the risk of the costs of making an application where permission is not granted on providers in order to incentivise them to focus more on the proper application of the criteria which determine whether a case qualifies for legal aid under the relevant regulations. The natural meaning of section 2(3) of LASPO 4 as to remuneration authorises regulations setting out the circumstances in which payment will not be made as well as those in which it will, and the rate of payment. He maintains that his decision to place the risk on providers is justified by the fact that in 2011/12 and 2012/13, excluding cases which settled, permission was refused in about 30% of the judicial review cases funded by legal aid where the provider had stated when seeking a legal aid certificate that the merits criteria were satisfied. 5 As to the allegation of a "chilling effect", the Lord Chancellor's case is that the evidence does not demonstrate that this will occur or that the scheme is inherently unfair. His case is that this allegation is premature because there has been no proper opportunity in the approximately nine months since the amendment has been in force to see how the system will work in practice. The evidence in support of the Lord Chancellor's case consists of the statement dated 24 October 2014 of David Holmes, a Policy Manager in the Ministry of Justice's Legal Aid Policy Team who is responsible for providing policy advice on civil legal aid, and the exhibits to it.

6

In section II of this judgment, we summarise the legal framework. Further details are given in Appendix 2, in which the material provisions of LASPO and the relevant regulations are set out or summarised. Appendix 3 contains a summary of the material parts of the consultation process undertaken by the Lord Chancellor before he introduced the regulation that is challenged in these proceedings. Our analysis of the submissions and our conclusions are contained in section III of the judgment. We have concluded:

(a) We reject the challenge based on ground 1, "strict" ultra vires/no power: see [27] – [28]);

(b) Because the regulation extends to putting providers "at risk" in situations which cannot be said to be linked to its stated purpose, the Padfield "inconsistency with statutory purpose" ground (ground 2), succeeds: see [43] – [60];

In the light of (b), it is not necessary to reach a decision on the challenge based on "chilling effect" in ground 3. Had it been necessary to do so, on the evidence before

us, we would, in the light of the existing authorities, have concluded that the high threshold for such a challenge has not been met: see [68] – [70].
7

In the interests of clarity, in the remainder of this judgment, as well as putting the background material in appendices, where it is necessary to avoid breaking up sentences with references to legislation, policy documents, and cases, we use footnotes. References to paragraphs in this and other judgments are indicated by square brackets and references to paragraphs in other documents by "§".

II. The legal framework

8

Since the introduction of legal aid in 1949, the legislation has defined the services to be provided and stated that the lawyers who provide them should be remunerated for work reasonably done. The coalition government formed after the 2010 election, which was dealing with the problems caused by the size of the nation's deficit, considered that the overall cost of legal aid was too high and was unsustainable. In November 2010, it published a consultation paper, CP12/10, Proposals for the Reform of Legal Aid in England and Wales. The introduction reiterated the intention stated in the coalition agreement to reserve public funding for "serious issues which have sufficient priority to justify the use of public funds" subject to people's means and the merits of the case. One focus was on a simpler system allowing people to resolve issues out of courts using more informal remedies. Another was to narrow the type of issue and proceeding which justified legal aid and to reduce fees by 10%: see e.g. §4.12. The indication given was (see §3.22) that, in general, remuneration would continue to be on the basis of standard fees for legal services reasonably provided, and there was no indication of a move away from this.

9

As far as judicial review is concerned, the consultation paper stated (see §§4.96 – 4.99) that proceedings where litigants seek to hold the state to account by judicial review are important, and legal aid for most public law challenges is justified. It also stated that the permission stage is an important part of the process because it helps to establish whether the applicant has an arguable case, and because it helps to focus both the court's time and legal aid resources on meritorious cases. The regime for legal aid in LASPO was the outcome of this process.

10

LASPO and several sets of regulations made under it came into force on 1 April 2013. The regulations made under LASPO which came into force on that day which are relevant to these proceedings are: the Civil Legal Aid (Procedure) Regulations 2012 SI 2012 No 3098 ("the Procedure...

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