New LAA position statement on statutory charge

Family practitioners will be aware of a difficulty with the application of the statutory charge in some cases. Failings by a local authority towards have led to damages being sought on behalf of the child under the Human Rights Act.However, where this is done within the care proceedings it meant the damages would be swallowed up by the statutory charge which recovered the cost of the care proceedings. A line of cases confirmed the proper approach was to bring the damages claim separately to the care proceedings. Although this would mean a separate legal aid certificate, there was still an issue around the extent to which these were connected proceeding within s25 LASPO, meaning the statutory charge would still bite to recover the costs of the care proceedings. See Chapter 5 of the Handbook for more.This issue has come to court again in the recent case of Northamptonshire County Council & Anor v The Lord Chancellor (via the ire County Legal Aid Agency) [2018] EWHC 1628 (Fam). Francis J noted that the LAA has now agreed to publish an updated statement of its position in these cases. Although it has not yet done so, the LAA’s position statement in this case is attached to the judgment and can be viewed here. It says

[If] HRA damages are obtained outside of the care or other family law proceedings (e.g. within separate civil proceedings, or by means of a settlement outside of the care or other family law proceedings), only the legal aid expenditure incurred in respect of pursuing an HRA claim will be treated by the LAA as provided in connection with it. If the LAA is asked to give an early indication as to whether the statutory charge will apply to any HRA damages in these circumstances, it will request undertakings from the provider and counsel in the care proceedings that they will not make a claim for costs in respect of any HRA work carried out as part of the care or other family law proceedings. Once the undertakings have been received, the LAA will be able to confirm that the statutory charge will not extend to the legally aided care costs. Note that, unless a certificate or amendment to a certificate specifically authorising an HRA claim has been granted, there could be no valid claim for such costs in any event.

For the avoidance of doubt, legal aid expenditure in relation to the HRA claim will form a statutory charge in respect of any damages or costs recovered in the settlement of that claim, to the extent that a claim is made for costs from the LAA.

The LAA now clearly accepts that – provided proceedings are separate – the HRA damages will not be used via the statutory charge to recover the costs of the care proceedings. However any legal aid costs in the HRA claim will. Such cases will often be unsuitable for a CFA and the costs protection afforded by a legal aid certificate will be needed. Even if costs are awarded in the event of a successful claim they will not cover the legal aid only costs and perhaps not part of the substantive work. This leaves practitioners with the invidious choice of not claiming perhaps significant costs, or seeing them recouped from their child client’s damages. However this position seems as far as the law can go in these situations. Whether it is just for the state to recover costs from damages awarded to a child client for HRA breaches by the state is essentially a political and policy question, and perhaps one the forthcoming LASPO review may address.

UPDATE 11 July: The LAA has now published the statement on its guidance page here