The CLA(R)(A) (No 3) Regs 2014, which came into force on 22 April 2014, amended the Civil Legal Aid (Remuneration) Regulations 2013 SI No 422, adding reg 5A. This provided that:

The claim, brought by Ben Hoare Bell, Deighton Pierce Glynn, Mackintosh Law, Public Law Solicitors and Shelter (for which the Public Law Project as well as Martin Westgate QC and Martha Spurrier, both of Doughty Street Chambers, acted) challenged this unlawful amendment.

They won on the second argument only. The LC had argued that reg 5A would incentivise legal aid providers to more rigorously examine the merits of a case before issuing JR proceedings, and, as a result, it would ‘enhance’ and make ‘more effective’ the merits criteria in the LASPO statutory scheme.

Rejecting the LC’s argument, the Divisional Court observed that, in some JR cases, events will occur that are unforeseeable or outside the provider’s control, and that could weaken a claim and/or make continuing the application for permission considerably more expensive than anticipated. The court identified three scenarios (where the defendant withdraws the decision challenged; where a judge lists a case for an oral permission hearing; and where a rolled-up hearing is ordered) as examples of cases ‘where it is clear that the anticipated merits and risk have changed as a result of something that was not foreseen by the provider and was outside his or her control, such as the action of a third party or the defendant, [so that] it is difficult to see how the “incentivising” purpose given for the regulation is served’ (para 60).

The court found that, in such circumstances, there was no rational connection between the effect of reg 5A and its stated purpose (para 43). In such cases, the court found that ‘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’ (para 52).

The CLA(R)(A) (No 3) Regs 2014 were quashed on 19 March 2015 and the LC was ordered to pay all of the claimants’ costs.

The claimants’ view is that the LC was under a clear obligation to consult before laying this new regulation because: (a) he has created an expectation of consultation given the history of this provision; (b) the judgment identified (but did not decide) an important issue – the possible implications of the regulation for the professional duties of solicitors who might be unable to withdraw from representation of a case that still met the merits criteria but had become too financially risky – on which consultation with professional bodies and others is clearly called for; and (c) the exceptions to the prohibition in the new regulation are clearly not the limit of cases where ‘anticipated merits and risk have changed as a result of something that was not foreseen by the provider and was outside his control’, as the court had explained. This, after all, was the ratio of the judgment: the LC should have consulted in order to identify what other scenarios would create inconsistency between the new reg 5A and its stated purpose.

In reality, it may be the election that determines whether the claimants – if supported – challenge the new reg 5A. The Labour party has said that, if elected, it will annul it.