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Children’s legal aid funding and the LAA’s statutory charge

Towards the end of 2016, there was an interesting judgment from Keehan J in P v A Local Authority, which related to proceedings involving a child (P), a local authority and the Legal Aid Agency (LAA). In a decision that considered matters under the Human Rights Act 1998 (HRA) and CPR 21, Keehan J determined that the legal aid statutory charge did not apply to a human rights damages claim, which had been brought for breach of P’s confidentiality. Instead, the claim was treated separately.

Background

P was a minor and a ward of the court. In 2015, the court had made a declaration that the local authority was not under a duty to disclose information about P to his adoptive parents. No order for costs was made in those proceedings (the Wardship Proceedings) in which P had the benefit of legal aid.

An employee of the local authority subsequently disclosed information about P to friends of P’s adoptive parents. P then sought to bring a claim for breach of Article 8 of the HRA  as a result of that disclosure. The local authority admitted liability after a letter before action was sent and damages of £4,750 were agreed.

There were issues about:

  • Whether the scope of P’s legal aid funding was extended to cover such a claim.
  • If the LAA’s statutory charge applied, whether or not funding was available.

If so, this would mean that the entire sum of damages was eaten up by the costs of the Wardship proceedings.

The statutory charge

The LAA’s statutory charge has been part of the legal aid scheme since it was introduced in 1949. It is now provided for in section 25 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) and in short means that the LAA has first charge over any sums or property realised in proceedings by a legally aided party. In an ideal world, the legally aided party recovers damages or property and their costs, but if, for whatever reason, the costs are not recovered, then the damages will be used to reimburse the LAA for the costs paid out; anything remaining would be paid to the party.

In this case, the LAA had extended P’s funding certificate to pursue a declaration that an injunction had been breached, but specifically refused to fund a claim for damages. In fact, no injunction had been ordered, as the order made in 2015 was a declaration that the local authority was not bound to provide information. As such, it seemed that the claim for damages was not covered by P’s legal aid and so it was argued that the statutory charge should not apply. The LAA argued that where damages were recovered “in connection with the civil legal services” provided under a funding certificate, the statutory charge applied to those damages.

CPR 21

Since P was a minor, any settlement reached in respect of the claim for damages was subject to the provisions of CPR 21.10. As such, no settlement can be valid without first being approved by the court. Such approval should be sought using the procedure set out in Part 8 of the Civil Procedure Rules (CPR). However, there is guidance given in Local Authority v MS saying that HRA claims “can and should be dealt with within the context of the pending care proceedings” which P relied on.

The court noted that the LAA had drawn a clear distinction between a claim for a declaration that there had been a breach and a claim for damages, agreeing to fund the former but not the latter. P was therefore not legally aided for the purposes of pursing a claim for damages, and so the statutory charge would not apply.

Further, Keehan J proposed that, had P issued a completely fresh HRA claim using the Part 8 procedure, rather than having it dealt with within the Wardship Proceedings, then the statutory charge would not apply.

P and the local authority agreed with this approach, but the LAA did not and made 10 points, which Keehan J addressed in turn in his judgment. I will not set them out in detail here, but the result was that Keehan J concluded that:

  • In the first instance, the Lord Chancellor did not have the discretion or power to waive the statutory charge if it applied.
  • The funding decisions made by the LAA were unreasonable, incomprehensible and in some aspects, plainly wrong.
  • It would not be just if P was denied the benefit of the damages awarded to him as a “result of the wrongful conduct of an organ of the state”.
  • The LAA refused to cover the claim for damages, and damages awarded to P were done so in proceedings that were not covered by a public funding certificate.
  • The damages recovered by P were not recovered “in connection with which civil legal services were provided”, that is, the Wardship Proceedings.
  • The statutory charge is not, and cannot be, applicable to P’s award of damages.

Conclusion

In light of the discussions and comments made in Keehan J’s judgment, it appears that it would have been simpler and more straightforward if P’s representatives had followed the provisions of CPR 21 and issued separate Part 8 proceedings. Had they done so, P’s claim for damages would have been dealt with completely separately from the Wardship Proceedings, and provided greater clarity between the proceedings that were publicly funded and those which were not.

I also consider that, even if it had been desirable for both claims to be considered in the same set of proceedings, once the Part 8 claim was issued, it could have been consolidated with the Wardship Proceedings under the courts general case management powers (CPR 3(1)(g) or FPR 4.1(h)).

Further, given this is what the CPR provides for, P would not be criticised by the court or local authority for issuing separate Part 8 proceedings.

 

Hodge Jones & Allen Joseph Henry

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