The High Court was recently called on to decide on the boundary between Very High Cost Cases and graduated fees in criminal work in The Lord Chancellor v Alexander Johnson & Co Solicitors & Anor [2011] EWHC 2113 (QB).
The solicitors, Alexander Johnson & Co, were instructed to act for a defendant in a serious multi-handed robbery case. They were not initially instructed, but took the case on a transfer of legal aid. A month after they became involved, the LSC (having been notified by another firm involved in the case), decided that it was a VHCC and therefore subject to VHCC contracts rather than the Litigator Graduated Fee Scheme. Three days after receiving the formal notification from the LSC, they replied indicating that their client was likely to plead guilty and refusing to enter a VHCC. Two weeks later he did plead guilty; four days after that the LSC responded to the firm confirming the classification of the case as a VHCC.
The solicitors and counsel then applied to the Crown Court for the Representation Order to be withdrawn and continued to represent the client pro bono. They claimed under the graduated fee schemes for litigators and advocates; the LSC refused and the Costs Judge allowed an appeal. The LSC then appealed to the High Court.
The solicitors and counsel relied on Paragraph 10 of the Criminal Defence Service (Funding) Order 2007, which as amended provides:
(5) Where a case becomes a Very High Cost Case after a representation order has been granted and is transferred from the litigator named on the representation order to a new litigator–
(a) the original litigator will be remunerated [at the same rates as those set out in Annex 7 to the Very High Cost Case contract]; and
(b) the new litigator will be remunerated in accordance with [that contract]
(6) Where a case becomes a Very High Cost Case after a representation order has been granted and the representation order is withdrawn before the end of the case, the litigator will be remunerated in accordance with the table following this paragraph as appropriate to the circumstances and timing of the withdrawal
One might think that that was determinative; a representation order had been granted, afterwards the case became a VHCC, the representation order was withdrawn before the end of the case. Therefore, “the table following this paragraph” (i.e. LGFS / AGFS rates) applies.
However, the Court held that the wider context needed to be considered. Paragraph 3 (6A) says that the Funding Order as a whole does not apply to VHCC work. Instead cases determined to be VHCCs are governed by individual case contracts. The purpose of paragraph 10(5) is to deal with cases where a non-panel member firm is instructed, the case becomes a VHCC, and as a result it has to be transferred to a panel member firm; the purpose of 10(6) is to deal with the same situation where the representation order is withdrawn rather than transferred. Alexander Johnson & Co, as a panel member firm, could not be paid LGFS rates simply by obtaining a withdrawal of the representation order once the case had been classified as a VHCC.
Davis J said that it has become “notorious” that legal aid rules lead to swings and roundabouts. In this particular case, the firm were £270,000 worse off by the decision to apply VHCC rather than LGFS rates, which is a pretty significant swing. That aside, however, it is perhaps unsurprising that the Court would find that, there being a scheme for payment of high cost cases, it could not be side-stepped by withdrawal of representation.
Legal Aid Handbook 
The issue here, it does seem to me is ‘at what rate should the arrears due to Messrs Johnson & co be paid; LGFS or VHCC’. If that’s the case and in the absence of any foul play then its simple; case becomes VHCC, Johnson & Co withdraws rep order, LSC pays them at current LGFS rate (whatever it is). The withdrawal of rep order signals the end for Johnson & co & they should get their fees. However i suspect LSC found out it the case would have been done more cheaply had it been certified a VHCC from the onset; hence its decision to appeal which seems a bit mischievous come to think of it!!
In essence that was the firm’s argument; rather than enter the VHCC they agreed to act pro bono and the rep order was withdrawn, so they should be paid at LGFS rates. The Court rejected that argument.
Incidentally, para 10(5) and (6) quoted above have been replaced from 3rd October 2011 by new paras 10(8) and 10(9). Para 10(9) reads the same as the old 10(6) and therefore the Johnson case remains the position.
The re-numbering is because of changes to that part of para 10 that deals with non-VHCC cases.