Court of Appeal says exceptional funding regime is lawful

The Court of Appeal has given judgment in the case of Director of Legal Aid Casework and another v IS [2016] EWCA Civ 464, the Director’s appeal against the judgment of Collins J in the High Court that the exceptional funding regime was inherently unlawful.

Laws LJ gave the main judgment, with which Burnet LJ agreed. He said that there were clear flaws in the operation of the scheme which had resulted in unfairness in individual cases. But it is necessary to look at the range of cases, and more than error in individual cases is required; unfairness – to a high threshold – must be shown in the scheme itself. He said that it is important to distinguish a bad scheme and one that is operated badly. And a judge must be careful not to stray into matters of underlying policy.

All sides accepted that there had been flaws in the operation of the scheme. Improvements were needed. But the evidence supplied of experience of use of the scheme was of limited value and unreliable. Significant improvements had been made since Gudanaviciene, showing that both the LAA and providers were on a learning curve. That there was a low number of applications, and a low success rate, didn’t of itself show that the scheme was unfair, and the resources available to legal aid are limited. Collins J hadn’t shown how his individual criticisms of the scheme added up to systemic unfairness, and it was Laws LJ’s “impressionistic” judgment that they didn’t. Neither did he or Burnet LJ consider the merits test or the Lord Chancellor’s Guidance to be unlawful.

Dissenting, Briggs LJ said that he would find the scheme unlawful. Although he agreed with much of what Laws LJ had said, he found that a key feature of the scheme was that its complexity was such that legal assistance was required. As there was no payment available for unsuccessful applications, and such a low success rate, it is uneconomic for lawyers to take part it in it. That is an inherent flaw in the scheme. A learning curve might help those applications that are made, but is no answer to those that aren’t.

Comment

The views of the majority are not wholly persuasive. They recognise a number of powerful criticisms of the operation of the scheme and the injustice that has resulted in individual cases. But all to often that is dismissed or disregarded – even though Laws LJ readily admits that the Court didn’t read all the evidence – and where it is not it is explained away or the Director’s response accepted. The thrust of the majority view appears to be that the scheme is badly operated, but not quite bad enough of itself to be unlawful. But the conclusion that the whole is less than the sum of the parts does not convince.

Wider implications

Following Collins J’s finding in the High Court that the merits test was unlawful, the Lord Chancellor introduced a new merits test. This reversed the exclusion of borderline cases, and extended legal aid to poor (but not very poor – i.e. less than 20% prospects of success) cases. That change applied not just to exceptional cases but to in scope cases as well; now that the Court of Appeal has found that the previous iteration of the merits test was not unlawful, it may be that this wider merits test will be withdrawn. It remains to be seen whether the case will go on to further appeal.