Thirty Seventh Report
Instruments Drawn to the Special Attention
of the House
The Committee has considered the following instrument
and has determined that the special attention of the House should
be drawn to it on the grounds specified.
A. Civil
Legal Aid (Remuneration) (Amendment) (No. 3) Regulations 2014
(SI 2014/607)
Date laid: 14 March
Parliamentary Procedure: negative
Summary: This instrument amends the Civil Legal
Aid (Remuneration) Regulations 2013 (SI 2013/422) to provide that
the Legal Aid scheme will not pay for civil legal aid services
that consist of making an application for judicial review unless
either permission is given by the court, or, where the case concludes
prior to a court decision, payment seems reasonable to the Lord
Chancellor (in practice the Legal Aid Agency). While we note the
MOJ's intention to ensure that Legal Aid is not wasted on hopeless
and frivolous cases, judicial review plays a significant role
in checking that the actions of the Executive are consistent and
rational. As several of the submissions we have received state,
it is also used to test "new or disputed borders of the law"
to set precedents and to clarify how new legislation should
properly be interpreted.
In this very sensitive area MOJ should have
explained better how the revised payment system will function.
We note with concern that there are key aspects of the Regulations
that are not clear to organisations such as the Howard League,
Justice and Shelter that deal routinely with such cases. It therefore
seems likely that providers who are uncertain about whether they
will get paid for their work will not put themselves forward to
test the grey areas of the law. The Committee notes that using
figures for 2012-13 MOJ states that these changes would definitely
have removed legal aid from 20% of cases (751) and that up to
69% of the total cases (2,483) might have been affected. That
the MOJ itself cannot state with any certainty how many cases
would receive a discretionary payment starkly underlines the concerns
expressed in the submissions received and published on our website.
These changes aim to save between £1-3 million from the Legal
Aid budget but the Committee was concerned that savings in this
area will simply transfer costs to another area.
We also note that there are other changes proposed
in Part 4 of the Criminal Justice and Courts Bill currently before
the Commons which may change the judicial review landscape further
and this measure should be set against the wider context.
As a minimum the MOJ should, before the
legislation comes into effect, provide urgent clarification of
exactly what work will, and will not, be paid for and how
the Legal Aid Agency will exercise its discretion over payment.
These Regulations are drawn to the special attention
of the House on the grounds that they are legally important and
raise issues of public policy likely to be of interest to the
House.
1. These Regulations have been laid by the Ministry
of Justice (MOJ) under powers in sections 2(3), 41(1) and (3)
of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
They are accompanied by an Explanatory Memorandum (EM), and additional
information from MOJ has also been included in this report. The
Committee has received submissions on the instrument from Caroline
Lucas MP, Andrew Slaughter MP, the Howard League for Penal Reform,
the Immigration Law Practitioners' Association (ILPA), Justice,
the Legal Aid Practitioners Group, Liberty80, Shelter, Ms Tew
and the Young Legal Aid Lawyers: key points from these letters
are referred to below and the full text of each is published on
the Committee's webpage.[1]
2. This instrument amends the Civil Legal Aid
(Remuneration) Regulations 2013 (SI 2013/422, "the main Regulations")
to provide that the Legal Aid scheme will not pay for civil legal
aid services that consist of making an application for judicial
review unless either permission is given by the court, or, where
the case concludes prior to a court decision, payment seems reasonable
to the Lord Chancellor (in practice the Legal Aid Agency (LAA)).
BACKGROUND
3. Judicial review is a process by which individuals,
businesses and other affected parties can challenge the lawfulness
of decisions or actions of the Executive, including those of Ministers,
local authorities, other public bodies and those exercising public
functions. For example, a claimant may seek to judicially review
a local authority's planning decision, or a decision relating
to housing.
4. Judicial review proceedings must be commenced
by filing a claim form at court which sets out the matter the
claimant wants the court to decide and the remedy sought. Such
claims are governed by Part 54 of the Civil Procedure Rules. All
remedies sought must be specified on the claim form. Any request
for interim relief (e.g. an injunction) is governed by Part 25
of the Civil Procedure Rules (but may be included in the claim
under Part 54). The claim must be submitted promptly and in any
event within three months of the grounds giving rise to the claims.[2]
The claim form must be served on the defendant and any other interested
party within seven days of issue. If the other parties wish to
take part in the proceedings, they are required to file an Acknowledgement
of Service within 21 days of the claim form being served on them.[3]
In order for a claim for judicial review to proceed to a substantive
hearing, the court (or Upper Tribunal, in the case of judicial
reviews within its jurisdiction) must first give permission.
THE CHANGES MADE
5. Prior to the amendments taking effect, all
work on a judicial review case is payable (in accordance with
regulations 6 and 7 of the main Regulations), regardless
of whether the courts give permission for the case to proceed
to a substantive hearing. However, once the amendments set out
in new regulation 5A take effect, legal aid providers (i.e. solicitors
and advocates) will no longer be paid for their work on making
an application for judicial review unless one of two conditions
is met. First, providers will be paid where the claim is given
permission to proceed by the court. Second, providers will be
paid where permission is neither refused nor given (that is, where
the case concludes prior to a decision on permission), at the
discretion of the Legal Aid Agency, taking into account the circumstances
of the case and three factors (set out in regulation 5A(1)(b))
in particular:
- the reason why the provider did
not obtain a costs order in favour of the legally aided person;
- the extent to which and the reason why the legally
aided person obtained the outcome sought in the proceedings; and
- the strength of the application for permission
at the time it was filed based on the law and on the facts which
the provider knew or ought to have known at that time.
It should be noted that the scope of this discretion
was widened to the current wording following the views expressed
in response to the initial consultation.
6. The limitation on payment only applies to
the making of the application (regulation 5A(1)). Therefore, MOJ
states, the amendments have no impact on payment for the earlier
stages of a case, which investigate the prospects and strength
of a claim (including advice from Counsel on the merits of the
claim) and engage in pre-action correspondence aimed at avoiding
proceedings: preparatory work on the permission application will
remain payable under regulations 6 and 7 of the main Regulations
as now. Similarly these changes do not apply to payment for disbursements,
for example, experts' fees (regulation 5A(2)).
THE POLICY OBJECTIVE
7. In the EM at paragraph 7.2 MOJ states that
the policy objective of the instrument is to "transfer the
financial risk of work on an application to the legal aid practitioner
with the intention of bearing down on the overall cost of Legal
Aid" but it does not offer an estimate of how much this is
expected to save. In supplementary information MOJ states:
"In 2012/13 there were 3,617 judicial review
cases which received legal aid funding:
· Permission
was refused in 751 cases. These cases would no longer receive
legal aid funding under the proposal;
· 539
cases had permission granted and would continue to receive funding
under the proposal;
· No proceedings
were issued in 595 cases. These cases would not be affected by
the proposal;
· Due
to uncertainty in recording practices, up to another 1,732 cases
could be affected by the proposal. We expect that a proportion
of these cases would receive a discretionary payment from the
LAA, but we cannot say with certainty how many. It is also likely
that some of these cases will not have issued proceedings and
will therefore not be affected by the proposals.
We estimate that there will be a saving of between
£1 million and £3 million per annum for the legal aid
fund. This is based on between 751 to 2,483 fewer cases being
funded as a result of this policy."
8. The
Committee notes that using figures for 2012-13 these changes would
definitely have removed legal aid from 20% of cases (751) and
that up to 69% of the total cases (2,483) might have been affected.
That the MOJ itself cannot state with any certainty how many cases
would receive a discretionary payment starkly underlines the concerns
expressed in the submissions received.
9. These figures do not specify whether the cases
refused funding would be the weak or frivolous cases and we are
concerned that a number of stronger cases will be deterred by
this funding change. While MOJ state that these changes aim to
save £1—3 million from the Legal Aid budget the Committee
is concerned that these changes will simply transfer costs to
another area, for example, if individuals seek to represent themselves,
which generally takes up more of the courts' time and resources.
UNINTENDED CONSEQUENCES
10. The Committee has received ten submissions
expressing concerns about the unintended consequences that this
change may have, given the important role judicial review plays
in the checks and balances on the power of the Executive.
REDUCING CHALLENGE TO THE EXECUTIVE
11. JUSTICE states that reducing a person's ability
to seek a judicial review will inhibit transparency and accountability
in public decision-making and the long-term development of public
and administrative law. Ms Tew similarly points out that judicial
reviews are often test cases where the executive may have misinterpreted
the law or there may be insufficient legal authority to make the
limit of its power clear. Caroline Lucas MP points out that judicial
reviews also deal with challenges where people with mental health
problems are in dispute with a local authority about their care.
12. Liberty 80 clarifies that when undertaking
judicial review the court does not make an assessment of the merits
of the Executive's power nor replaces that decision with one of
its own, rather it tests whether a decision made was legal, rational
and procedurally correct and that this is a "limited but
vital part of our delicate system of checks and balances which
protect individuals from the arbitrary exercise of power by the
state". The letter goes on to state that it is well known
that cases frequently settle before the permission stage because
a public authority acknowledges wrong-doing, but in these circumstances
the legal representative would be fundamentally uncertain whether
he would get paid for the work done.
13. The Howard League for Penal Reform points
out that these Regulations reduce the chance of an individual
pursuing the case themselves and that there are complementary
changes proposed in Part 4 of the Criminal Justice and Courts
Bill, currently before the Commons, which would make it less likely
that individuals will be supported through judicial reviews brought
by civil society organisations.
14. Both the Young Legal Aid Lawyers and ILPA
comment that the "exceptional" case funding scheme does
not provide a sufficient safety net as statistics show only a
3% success rate overall, 1.22% for non-inquest related applications.
15. Many of the submissions refer to this as
a "chilling effect" which in practice means that these
are not simply regulations about remuneration for legal representatives
but ones that will make a significant difference about whether
judicial review is in practice available to those needing to challenge
decisions by the State. For this reason several of the letters
question the power under which this instrument is made, stating
rather that it should have been made under section 9 of the Act
which would attract an affirmative procedure. ILPA also comments
on the timing, stating that laying an instrument subject to negative
resolution means that it is likely to come into effect, on 22
April, without there being an opportunity for any prayer to be
heard before the House rises on 9 April.
REDUCING AVAILABILITY OF PUBLIC LAW LAWYERS WILLING
TO TAKE ON CASES
16. JUSTICE and Liberty 80 are both concerned
that the uncertainty over whether they will be paid or not will
deter providers from taking on cases. Under the new regulation
5A (1)(b) a provider will only be paid in a settlement case at
the discretion of the Legal Aid Agency (LAA), which includes the
LAA's assessment of "the strength of the application at the
time it was filed and the facts which the provider knew or ought
to have known at that time." JUSTICE argues that cases evolve
rapidly and may change without forewarning as a result of actions
outside the knowledge and control of claimants or their representatives.
WHAT A PROVIDER OUGHT TO HAVE KNOWN
17. Liberty 80 states that many of the cases
subject to judicial review concern the "new or disputed borders
of the law. It will inevitably be difficult for the representatives
involved to assess whether or not the court will grant permission
in such cases." Liberty 80 states that, in its experience,
defendants often fail to seriously engage with a claim during
the early stages only producing important evidence or making key
arguments when a case comes before the courts. In these cases
it is very difficult for a provider to assess accurately the merits
of the claim at the outset. So a provision that allows the LAA
to second guess what the provider should have known is likely
to end in arguments between the provider and the LAA but there
does not appear to be a route of appeal or arbitration to resolve
disputes.
18. When asked about what the appeal mechanism
might be in this case MOJ responded:
"A provider who disagrees with the LAA's
conclusion on whether they should receive payment under the discretionary
criteria will be entitled to apply to the LAA for an internal
review of the decision. This process will be set out in the providers'
contract with the Legal Aid Agency. The LAA's decision will ultimately
be subject to judicial review."
The circularity of this process is apparent. The
Legal Aid Practitioners Group suggests that appeal to the Independent
Funding Adjudicator would be a more appropriate route.
INTERIM RELIEF
19. Almost all the submissions question the position
for work done to obtain interim relief which is used, for example,
to require a council to provide temporary accommodation for a
homeless person while the decision on that person's housing application
is reviewed. Shelter states that it has corresponded with MOJ
on this subject and is clear that it is not the MOJ's intention
to exclude applications for interim relief from the preparatory
work which will still be automatically paid for by Legal Aid.
However its lawyers' reading of the new Regulation 5A is that
interim injunctions in judicial review proceedings are specifically
dealt with in rule 3 of Part 54 of the Civil Procedure Rules and
will therefore come under the discretionary payment rules. The
Legal Aid Practitioners Group takes the same view stating that
applications for interim relief are made at the same time and
form part of the grounds for judicial review so there is no separate
application under Part 25 of the Civil Procedure Rules. The majority
of the other submissions find this similarly ambiguous.
LACK OF CLARITY
20. A recurring message in the submissions is
that "there is a lack of clarity and precision to the discretionary
criteria" (Young Legal Aid Lawyers); the discretion allowed
to the LAA "does not allow for sufficient business certainty
… it also places an additional and unnecessary burden on
the lawyer to retrospectively justify work" (Howard League);
"the Regulations are not sufficiently tightly drawn to give
certainty" (ILPA). In particular there is doubt as to
where exactly the boundary lies between what is the initial investigation
which can be paid and what is "civil legal services consisting
of making that application" which must not be paid.
21. In this context the Committee notes that
the Explanatory Memorandum says guidance is not being prepared
specifically on this instrument but the LAA is providing training
for legal aid practitioners. Paragraph 9.1 goes on to say "There
is no need for public guidance on these changes as they apply
only to remuneration paid to legal aid practitioners". We
hope what MOJ means by that is that no separate guidance for the
public is required, rather than whatever interpretive guidance
the LAA issue will not be published, as publication of guidance
that may influence its decisions forms part of the transparency
and accountability that the LAA, like any public authority, owes
the public. We share the view that while it is essential that
there is published unambiguous guidance on how LAA intends to
use its funding discretion, it would be preferable to have a clearer
definition set out in the Regulations themselves.
22. Additionally the MOJ has done little in the
EM to set the provisions in these Regulations against the wider
context of change through the Bill and a number of other recent
changes. The House should be provided with a better overview
of the cumulative effect of the various changes proposed to the
judicial review system.
CONCLUSION
23. While we note the MOJ's intention to ensure
that Legal Aid is not wasted on hopeless and frivolous cases,
judicial review plays a significant role in checking that the
actions of the Executive are consistent and rationale. As the
submissions state, it is also used to test "new or disputed
borders of the law" to set precedents and to clarify how
new legislation should properly be interpreted.
24. In this very sensitive area MOJ has made
a poor job of explaining how the revised payment system will function.
We note with concern that there are aspects of the Regulations
that are not clear to organisations that deal routinely with legal
matters. It therefore seems likely that providers who are uncertain
about whether they will get paid or not for their work will not
put themselves forward to test the grey areas of the law. As
a minimum the MOJ should, before the legislation comes into effect,
provide urgent clarification of exactly what work will,
and will not, be paid for and how the Legal Aid Agency will exercise
its discretion over payment. It would be preferable if to have
a clearer definition set out in the Regulations themselves. We
therefore draw the Regulations to the attention of the House as
a matter of legal importance and public policy interest.
1 www.parliament.uk/seclegpublications Back
2
NB certain planning or procurement cases have shorter deadlines,
of 6 weeks and 30 days respectively. Back
3
For further details see paragraph 28: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/264091/8703.pdf
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