Grayling's judicial review limits deemed unlawful

The government's 'no permission, no payment' rules to limit judicial review have been declared unlawful by the High Court in a further blow to the Lord Chancellor's legal aid reforms.

Regulations came into force in April 2014 which removed guaranteed legal aid payments for judicial review applications challenging the decisions of government and public bodies unless they were granted permission by the court.

Four law firms - Ben Hoare Bell, Deighton Pierce Glynn, Mackintosh Law, and the Public Law Project - together with housing charity Shelter challenged the legality of the regulations.

They argued there was no power to make entitlement to payment dependent on the outcome of the case and that the regulation had a 'chilling effect' on access to court as lawyers would be deterred from taking cases due to the financial risk of running a case, preventing meritorious cases from being brought.

The Lord Chancellor argued that, under LASPO, he was entitled to place the risk of the cost of bringing an application on providers in order to provide an incentive for them only to take cases that would succeed.

He said that placing the risk on providers was justified by the fact that in 2011/12 and 2012/13 permission was refused in one-third (30 per cent) of cases funded by legal aid.

As to the allegation of the 'chilling effect' of the rules, he said it was premature as the evidence did not yet demonstrate it to be the case.

In a judgment today, Lord Justice Beatson rejected the arguments that the Lord Chancellor was acting outside his powers in making the regulations and said the court would also have rejected the argument in relation to their 'chilling effect', had it needed to consider it.

Despite this, he said that in three classes of cases: where defendants withdraw the decision challenged; where the court orders an oral hearing of the application; and, where the court orders a rolled-up hearing - there was no rational link between the regulations and the Lord Chancellor's aim.

"The reach of regulation 5A extends well beyond those in which such a regulation could lawfully incentivise providers to a sharper focus on the merits test in the way described in the consultation papers," he said.

Beatson LJ said that the discretionary powers of the Lord Chancellor to order payments in some circumstances were not sufficient to "cure" the incompatibility because the circumstances in which that could happen were too limited.

He added: "A regime which deprives a provider of an entitlement to remuneration because of circumstances outside his or her control where there is no rational or proportionate connection with the incentivising purpose given for the regulation has the potential to create a different incentive to providers, one not just to examine a case rigorously when considering whether the merits test threshold has been met, but, even in an ordinary case which breaks no new ground, to focus on a higher threshold for the sake of financial safety."

The court also expressed "great concern" at the 23 per cent drop in applications for legal aid in judicial review and a 15 per cent fall in the number of certificates granted cases since the regulations came into force, suggesting that a review be undertaken.

The court did not reach a decision on the relief that should be granted following its ruling, but said it would hear submissions on the issue.

Nicola Mackintosh QC, founder of claimant Mackintosh Law, said: "Judicial review is a vital tool to be able to challenge decisions of the state and make public bodies, including government, accountable.

"Where public bodies act unjustly and unlawfully, the public should be able to hold them to account. Without legal aid for judicial reviews, these cases will never be taken for people who cannot afford to pay, and justice is denied."

She added: "In the 800th year celebration of the sealing of Magna Carta, we must never forget that our rights have been hard won and can easily be taken away, so we welcome the decision of the court in this case."

A Ministry of Justice spokesperson said: "We are clear [that] hardworking taxpayers' money should not be spent on judicial reviews that are not given permission to proceed.

"We are therefore pleased this judgment confirms the principle of our reform is lawful. We will now carefully consider the technical aspects raised by the court and our next steps."

The Labour party last week confirmed it would reverse the government's restrictions on judicial review. Commenting on today's decision, shadow justice minister, Andy Slaughter, said: "The government's attack on judicial review has once again been deemed unlawful by the courts in another major embarrassment to Chris Grayling.

"It is now clear that Labour are the only political party standing up for civil liberties and the rights of the individual. That's why we've promised to dump the Tories' illiberal attack on judicial review and will act to restore it as a valuable check against the executive."

The Lord Chancellor has faced numerous legal challenges to the Ministry Justice reforms to cut legal aid. The courts have found his measures wanting in relation to the proposed 12-month residence test, exceptional funding scheme for judicial review, the wider exceptional funding scheme, and the ban on prisoners receiving books.