Blow for MoJ as regulations on judicial review and legal aid ruled unlawful

The proceedings in Ben Hoare Bell Solicitors & Ors, R (On the Application Of) v The Lord Chancellor [2015] EWHC 523 (Admin) were brought by four law firms and a charity, Shelter.

The claimants challenged the legality of an amendment to the legal aid scheme made by the Civil Legal Aid (Remuneration) (Amendment)(No 3) Regulations 2014. This inserted new Regulation 5A into the Civil Legal Aid (Remuneration) Regulations 2013.

In addition to the introduction of a ‘no permission, no fee’ arrangement, the changes also meant there would be no entitlement to payment where permission has neither been granted nor refused, for example where the claim has been settled or withdrawn.

However, in such cases the amendment gave the Lord Chancellor power to pay the costs of making the application where he considered that it was reasonable to do so. This discretionary power is in practice exercised by or on behalf of the Legal Aid Agency. Services in investigating the prospects of a claim are excluded and will be remunerated.

Two judges, Lord Justice Beatson and Mr Justice Ouseley, heard the case in the Divisional Court.

They noted that the reason given in the consultation papers for introducing Regulation 5A was to incentivise providers to focus more on the proper application of the merits test before applying for judicial review.

The Court rejected the claimants’ first 'strict' ultra vires ground of challenge. However, in relation to the second ground, the judges noted that in certain situations a provider could be deprived of the entitlement to remuneration because of circumstances outside his or her control.

They held that the scope of regulation 5A extended beyond the circumstances which could be seen as rationally connected to the stated purpose given for its introduction (the incentivisation of providers) in the consultation papers.

“To that extent it is inconsistent with the purposes of the scheme in LASPO [the Legal Aid, Sentencing and Punishment of Offenders Act 2012], and this application succeeds,” Lord Justice Beatson said.

The discretion to make payments where the Lord Chancellor considered it reasonable to do so did not cure the incompatibility.

Lord Justice Beatson added that in light of the court’s finding on the second ground of challenge, it was not necessary to reach a decision on the third ground. The latter involved a claim that the amendment was likely to have a "chilling effect" on access to the High Court in the sense that providers who risked not being paid would apply criteria that were stricter than those in LASPO and the regulations made under it.

The Court said it was "a matter of great concern" that there had been a 23% decline in applications for legal aid in judicial review claims since the 2014 Regulations came into force, and this suggested a government review was necessary.

However, Lord Justice Beatson said that had it been necessary to reach a decision on the third ground, then, on the evidence before the Court, the judges would, in the light of the existing authorities, have concluded that the high threshold for such a challenge had not at this stage been met.

The Divisional Court made no decision on what relief would be given following its findings. A hearing on this is expected to take place on 19 March.

Law Society President Andrew Caplen said: “This is a welcome result. Access to justice is the hallmark of a civilised society. We consider that the regulations would have made access to judicial review much more difficult for some of the weakest and most vulnerable in society and potentially made it easier for public bodies to act without due regard to the law.”

Campbell Robb, chief executive of Shelter, said: “This ruling is a significant win for hundreds of homeless families, and should mean that legal aid can still act as a safeguard to make sure councils who break the law by refusing to help them are challenged.

“It’s vital for families who have become homeless through no fault of their own to have the protection of legal aid for judicial review. For many this is the only safety net standing between them and the streets, which is why we have been fighting hard against the new regulations.”

A Ministry of Justice spokesperson said: "We are clear hardworking taxpayers' money should not be spent on judicial reviews that are not given permission to proceed. We are therefore pleased this judgment confirms the principle of our reform is lawful. We will now carefully consider the technical aspects raised by the court and our next steps.”

Martin Westgate QC and Martha Spurrier of Doughty Street Chambers were instructed by Polly Brendon at the Public Law Project.

The claimant firms were Ben Hoare Bell Solicitors, Deighton Pierce Glynn Solicitors, Mackintosh Law and Public Law Solicitors.

James Eadie QC and Richard O'Brien were instructed by the Treasury Solicitor.