The King on the Application of CR (by her litigation friend TI) v Director of Legal Aid Casework and Others
| Jurisdiction | England & Wales |
| Judge | Lady Justice Nicola Davies,Lord Justice Warby,Lord Justice Bean |
| Judgment Date | 23 June 2023 |
| Neutral Citation | [2023] EWCA Civ 717 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case Nos: CA-2022-001146 |
and
[2023] EWCA Civ 717
Lord Justice Bean
Lady Justice Nicola Davies
and
Lord Justice Warby
Case Nos: CA-2022-001146
CA-2022-001250
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
ADMINISTRATIVE COURT
MR C M G OCKELTON (Sitting as a Deputy Judge of the High Court)
CO/4226/2021
Royal Courts of Justice
Strand, London, WC2A 2LL
Amanda Weston KC, Oliver Persey and Isaac Ricca-Richardson (instructed by Public Law Project) for the Appellant
Malcolm Birdling and Sophie Bird (instructed by the Government Legal Department) for the Respondent
Hearing date: 25 May 2023
Approved Judgment
This judgment was handed down remotely at 10.00am on 23 June 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
This appeal concerns the circumstances in which a costs capping order (“CCO”) made under s.88 of the Criminal Justice and Courts Act 2015 (“CJCA”) should be set aside or varied. On 13 April 2022 Mr M Ockelton, sitting as a Deputy Judge of the High Court (“the Judge”), ordered that the appellant's CCO dated 25 January 2022 should be varied so as to apply only to costs incurred before the date of service of the order.
It is agreed that, pursuant to CPR 46.19, the court had jurisdiction to vary a judicial review CCO. In advance of the application to the Judge, it was agreed between the parties that the CCO could be varied so as not to apply prospectively. The issue between the parties was whether, given the factual circumstances of the case, the CCO should be varied retrospectively.
Factual background
On 8 September 2021, TI, CR's litigation friend and prospective adoptive mother, made an emergency application for Exceptional Case Funding (“ECF”) for representation in the Special Educational Needs and Disability (“SEND”) Tribunal appeal. In a letter dated 9 September 2021, the respondent refused the application on the basis that it was not accepted that TI was acting in a representative capacity, stating that she was acting in a parental capacity. As a result, the respondent stated that it was necessary to carry out a full means assessment of TI and her partner in order to determine eligibility for funding.
On 27 October 2021 the appellant applied for legal aid to challenge the refusal by means of judicial review. On 3 November 2021 the respondent refused to grant legal aid on the ground that the judicial review prospects of success were poor (less than 45%). A review was sought pursuant to regulation 44 of the Civil Legal Aid (Procedure) Regulations 2012 and in a decision dated 29 November 2021, the refusal was maintained.
On 15 December 2021 the appellant issued proceedings for judicial review of the respondent's 9 September 2021 decision. On 21 December 2021 the appellant made an application for a CCO pursuant to sections 88 – 89 CJCA. The order sought by the appellant was that (i) its total liability for the defendant's costs, and the costs of any interested parties, be limited to £5,000 (inclusive of any VAT); and (ii) the defendant's liability for the claimant's costs, and the costs of any limited party, be limited to (a) the claimant's reasonable costs recoverable at Government Legal Department (“GLD”) inter partes and Treasury Panel rates; and (b) disbursements.
On 25 January 2022 Mr T Smith, sitting as a Deputy Judge of the High Court, granted permission to apply for judicial review and made a CCO pursuant to CPR 46 Section VI, the terms of the CCO being:
1. The claimant's total liability for the defendant's costs and the costs of any interested parties shall be limited to £10,000 (inclusive of VAT and disbursements), and
2. The defendant's liability for the claimant's costs, and the costs of any interested party, shall (i) limit the claimant's representatives' remuneration to GLD inter partes and Treasury Panel rates and (ii) be subject to an overall cap of £36,000 (inclusive of VAT and disbursements).
The claimant had been granted an adverse costs indemnity by the Law Society in order to cover her costs up to the permission stage of the judicial review proceedings. On 9 February 2022 the Law Society agreed to extend the adverse costs order indemnity to trial, up to a maximum of £10,000.
On 18 February 2022 the appellant submitted a substantive application for legal aid in respect of the judicial review proceedings, which included a claim that the funding be backdated to the date of her original funding application, namely 10 December 2021. On 1 March 2022 the respondent granted the application, backdated to 10 December 2021.
On 17 March 2022 the appellant applied to amend her grounds of judicial review and, pursuant to CPR 46.19, to set aside the CCO ab initio indicating on the application form that an oral hearing of the application was not required. By a letter dated 18 March 2022 the GLD, instructed on behalf of the respondent, indicated that the respondent considered that any variation to the CCO should be prospective only.
In a letter dated 21 March 2022 the Public Law Project, now instructed on behalf of the appellant, wrote to the Administrative Court Office in response and stated:
“We wish to respond to the Defendant and First IP's submission that the variation of the CCO should be prospective only (i.e. that it should continue to apply in its original form to any costs incurred prior to variation).
Firstly, we note that neither party has provided any authority for this submission and that we are not aware of any authority capable of supporting it.
Secondly, the submission of the Defendant and First IP runs contrary to the important points of principle we set out in our original application to set aside the CCO, dated 17 March 2022 and, in effect, amount (sic) to an attempt to secure a costs ‘windfall’ which is no longer reciprocal as this Claimant is now fully covered by backdated legal aid.
Further, the CCO of 25 January 2022 imposes a two-fold limit on the costs the Claimant can recover if she is successful. The CCO both limits the Claimant's hourly rate remuneration to GLD and Treasury Panel rates and imposes an overall cap of £36,000 (including VAT) on the Claimant's costs.
A ‘prospective only’ variation to the CCO would therefore result in the Claimant's costs for all work done prior to variation being set at a level much lower than inter-partes rates (c. 40% lower). This would flout the principle outlined in R(E) v JFS [2009] UKSC 1 that publicly funded representatives should ordinarily be able to recover their costs at inter-partes rates where successful — so that the work of such representatives does not become “ financially unsustainable”. The point of a CCO is that it is an arrangement only available where, absent such order the claim would not be able to be pursued. A ‘reciprocal’ cap on recoverable costs is a measure to reflect a fair balance where such a cap is needed, not a means by which a defendant may seek to avoid ordinarily payable costs where they arise.
Naturally, even if the CCO is set aside ab initio, it will remain open to the Defendant and First IP to challenge the costs claimed by way of PoDs and detailed assessment in the normal way.
There are also issues of fairness and probity in play. This Defendant determines applications for legal aid in respect of legal action against herself. In this case, the Defendant initially refused legal aid for the Claimant's judicial review on grounds of merits, a decision this Defendant (rightfully) did not uphold once the Claimant had been granted permission by the High Court. If the Claimant's CCO was set aside on a ‘prospective only’ basis, and the Claimant's claim succeeded, this Defendant would benefit from her earlier wrongful refusal of legal aid because her costs liability would be considerably lower. This could have concerning implications for other cases where funding is sought from the DLAC to challenge the DLAC.
Finally, there is no rational basis to keep the CCO in place for any period whatsoever. The purpose of the CCO regime is to provide costs protection in public interest cases. The Claimant benefits from a legal aid certificate backdated to 10 December 2021, and therefore has costs protection under section 26 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 from that date, rendering a CCO unnecessary. The Defendant and First IP's suggestion is misconceived….”
A reply dated 5 April 2022 sent by the GLD on behalf of the respondent contained the following:
“…. The Defendant agrees that the order ought to be varied in light of the grant of legal aid to the Claimant, but does not consider that it would be appropriate to do so in the retrospective manner proposed. This is because the Claimant's proposal would retroactively expose the Defendant to a significantly greater adverse costs liability in respect of costs already incurred and currently covered by the CCO. That being so, while the Defendant agrees that it would be appropriate to vary the CCO, that variation should be prospective in nature, such that it does not apply in respect of costs incurred prior to the date of the Court's order varying the CCO. The effect would be that the Claimant could recover (in respect of costs incurred to date) up to the level of the cap, and further costs in the usual way from the date of the order onwards. Conversely, the Defendant would be doubly restricted — it could only recover its costs to date in accordance with the terms of the CCO and subject to the statutory costs protection which the grant of legal aid provides.
As against this, the Claimant's...
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