The Law Society, R (On the Application Of) v The Lord Chancellor, Court of Appeal - Administrative Court, August 03, 2018, [2018] EWHC 2094 (Admin)

Resolution Date:August 03, 2018
Issuing Organization:Administrative Court
Actores:The Law Society, R (On the Application Of) v The Lord Chancellor

Neutral Citation Number: [2018] EWHC 2094 (Admin)

Case No: CO/525/2018




Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 03/08/2018





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Dinah Rose QC and Jason Pobjoy (instructed by Bindmans LLP) for the Claimant

Martin Chamberlain QC, Richard O'Brien and Tim Johnston (instructed by the Government Legal Department) for the Defendant

Hearing dates: 17 and 18 July 2018

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A. Introduction

  1. This is another claim for judicial review of a decision by the Lord Chancellor to reduce the amount of money made available as legal aid for defending people accused of crimes. The decision challenged in these proceedings has reduced fees payable under a scheme called the Litigators' Graduated Fees Scheme under which most of the work done by ``litigators'' (typically solicitors) in preparing the defence of persons prosecuted in the Crown Court is paid. (There is a parallel scheme for advocates.) The principle of the Litigators' Graduated Fees Scheme - referred to for short in this judgment as ``the Scheme'' - is that a fixed ``graduated'' fee is paid for conducting a case irrespective of the number of hours spent working on the case. The fee is determined by a formula and depends on a number of factors, of which the most important are the nature of the offence charged, whether or not the defendant pleads guilty, the length of the trial (if the case goes to trial), the number of defendants in the proceedings and the number of pages of prosecution evidence (``PPE'') served. These factors are used as rough measures, or proxies, of the complexity of the case and of the amount and difficulty of the work which it is likely to involve.

  2. The decision under challenge was made on 24 October 2017 and implemented by the Criminal Legal Aid (Remuneration) (Amendment) Regulations 2017 (``the 2017 Regulations'') which came into force on 1 December 2017. The effect of the decision was to reduce the maximum number of PPE served on the defence which can be counted in fixing graduated fees from 10,000 pages to 6,000 pages. The result is that, in any case where more than 6,000 PPE are served, the graduated fee is to be assessed in the same amount as if only 6,000 PPE had been served without taking account of any additional complexity that may be reflected by the fact that the volume of prosecution evidence is in fact greater. It is possible to claim ``special preparation'' fees for reading or viewing pages in excess of this limit but these do not cover any additional work, such as obtaining further evidence, arising out of the prosecution evidence.

  3. Not all evidence actually served by the prosecution is included in the computation of PPE. In particular, evidence which has only ever existed in electronic form such as mobile phone records is not included unless the determining officer considers that in all the relevant circumstances (such as the importance of the evidence for the case) it ought to be included. The rationale put forward by the Lord Chancellor for the decision to reduce the maximum PPE allowed to 6,000 pages was, in summary, that there has in recent years been a steep increase in cases with high levels of PPE, which is said to have come about in part because a decision by a costs judge in a case called R v Napper [2014] 5 Costs LR 947 broadened the circumstances in which electronic evidence could be counted as PPE. According to the Lord Chancellor, the government had never intended to include such electronic evidence in the calculation. He considered that the result has been to increase the overall expenditure on the Scheme. The object of reducing the PPE limit was said to be to reverse this increase in cost and return the element of the Scheme driven by PPE to the level that it was before the Napper decision.

  4. The Lord Chancellor's decision is challenged by the Law Society, the professional body which represents solicitors in England and Wales, on four grounds:

    (1) It is argued that the consultation process undertaken before the decision was made was procedurally unfair because during the consultation the Ministry of Justice did not disclose the existence of the analysis on which it had relied to estimate the amount of the increase in expenditure said to have been caused by the Napper decision. The Law Society and other consultees therefore had no opportunity to comment on this analysis.

    (2) It is said that the decision was irrational because it was allegedly based on some manifestly erroneous assumptions including a misunderstanding of the effect of the Napper case and the analysis already mentioned which is said by the Law Society to have used a flawed statistical method.

    (3) It is said that the 2017 Regulations made in order to implement the decision constitute a disproportionate and unjustified interference with the right of access to justice protected by the common law.

    (4) It is asserted - albeit without much enthusiasm - that the decision confounded a legitimate expectation that no further reduction in criminal legal aid fees would be made before the Lord Chancellor had undertaken a review which has yet to take place.

  5. The Lord Chancellor's case, in summary, is that he reasonably concluded that the decision would restore compensation for PPE to about the levels previously seen before the definition of PPE was expanded by judicial decision; and also that this change was unlikely to affect the sustainability of the market for criminal defence work. He maintains that he took the decision on the basis of a careful quantitative analysis by officials and bearing in mind that (i) the effects of the decision would be monitored and (ii) criminal legal aid fees were to be more comprehensively reviewed shortly in any event. It is the Lord Chancellor's case that there was nothing procedurally unfair, irrational or otherwise unlawful about the decision.

  6. The claim was commenced on 24 January 2018. On 9 April 2018 William Davis J ordered that the application for permission to proceed with the claim should be adjourned to a rolled up hearing, to be listed before the end of July. The judge also gave directions for further steps in the proceedings, including the service of evidence. These directions did not provide for any expert evidence which, pursuant to CPR 35.4(1) and 54.16(2), may not be adduced without the court's permission.

  7. The Lord Chancellor's detailed grounds for resisting the claim and written evidence were served on 27 April 2018. When on 1 June 2018 the Law Society served evidence in reply, this included an expert's report from Professor Abigail Adams, an expert in econometrics. The Lord Chancellor responded by serving expert evidence on which he seeks to rely if the Law Society's expert report is admitted. The Law Society in turn served a supplemental report from Professor Adams commenting on the Lord Chancellor's expert evidence. As if that were not enough, the Lord Chancellor then served supplemental reports from his experts replying to the second report of Professor Adams. All this has been done without any permission from the court. We shall have to deal later in this judgment with the extent to which any of this evidence is admissible and should be admitted. We will also explain why the way in which the Law Society has gone about seeking to introduce expert evidence into the proceedings should not be followed in future.

  8. But before addressing that question and the issues in dispute, we must explain some more of the factual and legal background.

    B. factual and legal background

    History of the Scheme

  9. The Scheme replaced the standard fee and ex post facto payment scheme. The origins of the change can be found in the Carter Report on Legal Aid Procurement dated July 206 (``the Carter Report''). This recommended the implementation of a new graduated fee scheme whereby case fees would be linked to a formula rather than the length of time spent preparing the case, offering an incentive for early resolution of cases where appropriate, and efficiency more generally. Additionally, given that additional payments in a graduated fee scheme for PPE and days at trial were a good proxy for complexity, those cases that were genuinely complex cases and required greater solicitor input would receive a proportionately higher total case fee.

  10. The Carter Report led to the 2006 White Paper ``Legal Aid Reform: The Way Ahead'' (November 2006) (Cm 6993), announcing the introduction of the Scheme. The White Paper recognised the dynamic of ``swings and roundabouts'' in such a Scheme. A case that was more expensive to a firm than the standard fee would be balanced, ``in the long run'', by one that was cheaper.

  11. In June 2007 the Legal Services Commission (``the LSC'') published a consultation paper on fees payable under the Scheme. For this purpose an earlier extensive modelling exercise had been carried out, with the LSC sampling files as well as analysing data from some 273,000 claims. We have read various witness statements from solicitors describing their close involvement with the LSC in these early stages of devising the Scheme.

  12. The LSC's consultation paper recognised that the graduated fee was not intended to be an accurate individual case payment system, but rather a means of providing a firm with ``a reasonable overall payment for a large basket of cases'', again a case of ``swings and roundabouts''. It confirmed that, on balance, case type, class of offence and PPE were effective proxies to predict the likely weight of a case in the Crown Court. Following consultation the LSC published its response, with revised fees. The definition of...

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