Social Welfare Lawyers in the Centre of Birmingham

A Response to Extending Fixed Recoverable Costs in Civil Cases: Implementing Sir Rupert Jackson’s proposals

About us
The Community Law Partnership (“CLP”) is a firm of solicitors in Birmingham City Centre specialising in Housing, Community Care, and Public Law.

We run a pro-bono telephone helpline for Gypsies and Travellers, and have taken many cases to the Higher Courts which have changed the law. We have won several awards, including Social Welfare Law Firm/Not for profit agency at the Legal Aid Lawyer of the Year awards 2017. We employ 43 staff including; 28 fee earners, of whom 25 are solicitors. Virtually all of our work is either legally aided or pro-bono. We have a minimal amount of  privately paying work. We cannot meet the demand for our services, turning away twice as many potential clients as we take on. We run the Housing Possession Court Duty Scheme in Birmingham under a contract with the Legal Aid Agency. This is the largest such scheme in the country, and in the year to October 2019 we will have assisted 4535 defendants facing proceedings for possession of their home. We currently have 380 live files where we act for defendants to possession proceedings with the benefit of legal aid certificates.

Preliminary Remarks
We are dismayed by the peremptory manner in which legally aided cases are dealt with in the consultation. Legally Aided Claimants are identified as a group upon which the proposed reforms will have minimal impact.  The Impact Assessment (the “IA”) baldly states that “As there are very  few legally aided damages claims …….the volume of claims likely to be affected by this proposal is minimal.” We have seen the response of Housing Law Practitioners Association which deals extensively with Housing Disrepair Claims and we agree with what they say. The remaining civil claims for which legal aid is granted to Claimants are likely to be claims for unlawful eviction, where often very urgent work is needed to secure re-entry to the tenant’s home or the prevention of the disposal of all their worldly goods, often following violent episodes. These claims do not fit easily into the fixed costs regime, as they are atypical of most litigation.

The most glaring omission in the consultation document and the fatal flaw to its analysis of the effect of the proposals on legal aid firms is laid bare by the statement “For the same reason as set out for legally aided claimants above, the impact on legal aid firms is estimated to be minimal.” There has been absolutely no analysis of the impact on legally aided defendants. This failure is evident in the IA, the Equalities Statement (the “ES”), and the paper itself.

Far from the impact on legal aid firms being minimal, on those firms like CLP who practise legally aided housing law including defending possession proceedings, it will be devastating. It is no answer to say “it is unlikely that the FRC rates will be lower than legal aid rates”.  Legal Aid rates of pay are not viable, and firms such as ours rely on inter partes costs recovered to cross subsidise work done at legal aid rates. This has been recognised by the Supreme Court in the case of Governing Body of JFS and others [2009] UKSC 1:

“It is one thing for solicitors who do a substantial amount of publicly funded work, and who have to fund the substantial overheads that sustaining a legal practice involves, to take the risk of being paid at lower rates if a publicly funded case turns out to be unsuccessful. It is quite another for them to be unable to recover remuneration at inter partes rates in the event that their case is successful. If that were to become the practice, their business would very soon become financially unsustainable. ….”

These proposals, if applied to legally aided possession claims, will put us out of business, and are likely to do the same to other firms like ours. There is already a recognised national shortage of legal aid housing law providers. The Ministry of Justice (“the MOJ”) should be encouraging further providers into the legal aid housing law market, not threatening the very existence of those of us in it.

The consultation document, IA and ES  are shot through with a complete lack of understanding of legal aid practice, which is alarming given that the MOJ is responsible for legal aid policy.

The supposed benefits of the FRC regime are simply not available to legal aid lawyers and their clients:

[paragraph 82, IA]: “solicitors would no longer have to maintain documentation required for costs assessment ….”

Unless there has been a change of legal aid policy at the MOJ in relation to legal aid costs assessment in cases which are lost, this is simply untrue in relation to legal aid lawyers. We are required to give the Legal Aid Agency (“the LAA”) extremely detailed information about costs whenever we seek to amend a legal aid certificate and at the end of a case. It is a prerequisite for the holding of a legal aid contract that we hold a Lexcel or equivalent accreditation, which requires us to keep detailed information about costs. Legal aid lawyers are met with a double whammy – all of the disadvantages and none of the benefits.

[paragraph 82, IA]: “the options might generate business process efficiencies in the form of reduced management costs or overheads, in order for solicitors to maintain their profit margins….”

We are constrained by the requirements of our contracts with the MOJ via the LAA to have procedures in place which cannot be deviated from – it is not open to us to do this, the MOJ will not let us.

[paragraph 2.7, Consultation): “…people will be able to make more informed decisions on whether to take or defend legal action..”

It is difficult to see how this can be true of a tenant facing possession proceedings brought by his or her institutional landlord. There is massive inequality of arms. What is a defendant supposed to take into account when deciding whether to defend proceedings which would force them to give up their home? Should they just leave?

[paragraph 3.3, Consultation): “Sir Rupert recommends that the PAPs should be amended … Claimants should state their proposals in this regard in the letter of claim, and defendants should do the same in the letter of response”

This is pie in the sky when it comes to possession proceedings. Most tenants facing possession proceedings do not engage before the first court hearing. Many of them have defences which are only identified by expert housing law solicitors at the first hearing. Many are vulnerable. Most are disadvantaged. An increasing number lack mental capacity. Is the FRC regime intended to apply to these defendants too?

[paragraph  88, IA]:  “whilst some claimant lawyers might not be willing to take on some cases, others may enter or existing providers may expand to meet demand”

Quite apart from the fact that Defendants to possession proceedings are once again ignored, all of the evidence in relation to legally aided housing cases points in the opposite direction. The number of civil legal aid certificates issued for housing cases has fallen as more and more litigators have abandoned civil legal aid due to low rates of pay and restrictions in scope of legal aid. If we go, there will not be a queue of firms to replace us wanting to do legally aided possession work. This has important implications for the protection of Article 8 rights.


The Fast Track

1. Given the Government’s intention to extend FRC to fast track cases, do you agree with these proposals as set out? We seek your views, including any alternatives, on:

(i) the proposals for allocation of cases to Bands (including package holiday sickness);
(ii)  the proposals for multiple claims arising from the same cause of action;
(iii) whether, and how, the rules should be fortified to ensure that (a) unnecessary challenges are avoided, and (b) cases stay within the FRC regime where appropriate; and
(iv) Part 36 offers and unreasonable litigation conduct (including, but not limited to, the proposals for an uplift on FRC (35% for the purposes of Part 36, or an unlimited uplift on FRC or indemnity costs for unreasonable litigation conduct), and how to incentivise early settlement

As set out above, we undertake legally aided housing law. Most of the work that we do on the fast track consists of defending possession proceedings for legally aided tenants, sometimes with a counterclaim, sometimes not. The proceedings may be based on rent arrears, nuisance, unlawful occupation, lack of security of tenure, failure to vacate accommodation provided pending a homeless application, amongst others. Counterclaims may be for damages and orders for works for housing disrepair, for unlawful discrimination contrary to the Equality Act, or for a declaration as to the status of the occupier(s). We restrict our comments to these cases.

(i) No. Those facing possession proceedings often have a protected characteristic, most commonly disability. There is an obvious concern that if these proposals lead to a reduction in the number of firms willing to take on these cases, that may amount to unlawful indirect discrimination against this group. It may also lead to unlawful interference with the Article 8 rights of those facing possession proceedings, if, faced with a deep pocketed arm of government (e.g. the local authority), they can find nobody to represent them in what is acknowledged to be an extremely complex area of law. It is also likely to lead to more demands on the judiciary and an increase in the time taken to deal with these cases as the number of litigants in person rises and Court Duty Schemes collapse due to the inability of organisations to cross –subsidise their legal aid work with the money recovered from inter partes costs. Those who undertake legal aid work have to abide by the terms of a contract with the MOJ via the LAA. It would be unreasonable, in the Wednesbury sense, to oblige legal aid contract holders to comply with these very onerous contracts and at the same time to be subject to the FRC regime, whose perceived benefits are unavailable to them due to the LAA contract requirements. In many cases where a possession claim is successfully defended, there are no damages awarded. Yet the benefit achieved – avoiding homelessness – is priceless, both to the tenant and their family and to the government in terms of costs savings in health and social services involvement. The FRC regime, therefore, would unreasonably punish legal aid housing lawyers for taking on this work, as the FRC costs are even lower than for other cases as there are no damages from which to seek a percentage. All tracked possession cases are complex, and there are few things as fundamental in life, after your liberty, as the roof over your head. It is difficult to see how the basis, and anticipated costs/benefits, of the FRC regime can be squared with the requirements of the legal aid scheme. The Consultation Paper explicitly states at para 17 that no costs benefits analysis has been done in respect of these cases as there are so few of them. The simple solution, and perhaps the only lawful one, therefore is to exempt legally aided cases from the FRC regime. This is especially so in the case of possession proceedings, where the legally aided party is the defendant.

(ii) We have little experience of fast track cases where multiple claims arise from one cause of action.

(iii) This should be left entirely to the discretion of the judges, who have the hands-on case management knowledge and experience to make these decisions. This question is insulting to the district bench.

(iv) We would favour an unlimited uplift – deep pocketed opponents can cause a party to rack up large amounts of costs by ignoring court rules and orders and having to be brought kicking and screaming to trial/settlement. In our experience though, the thing that brings about settlement is disclosure, particularly the landlord’s records. If these were to be disclosed earlier disrepair damages claims would settle earlier. However if you are also seeking an order for repair works to be carried out, settlement is not in the claimant’s control, and often works are only agreed at the last minute. Would this amount to unreasonable conduct?

Noise Induced Hearing Loss 

2. Given the Government’s intention to extend FRC to NIHL cases, do you agree with the  
        proposals as set out? We seek your views, including any alternatives, on:

                        (i) the new pre-litigation process and the contents and clarity of the draft letters of
       claim (and accompaniments) and response.
                       (ii) the contents of the proposed standard directions, and the listing of separate     
                             preliminary trials.

We have no experience of this work and so express no view.

Intermediate Cases

3. Given the Government’s intention to extend FRC to intermediate cases, do you agree with the proposals as set out? We seek your views, including any alternatives, on:

(i)  the proposed extension of the fast track to cover intermediate cases;
(ii) the proposed criteria for allocation as an intermediate case and whether greater certainty is required as to the scope of the track;
(iii) how to ensure that cases are correctly allocated, and whether there should be a financial penalty for unsuccessful challenges to allocation;
(iv)  whether the 4-band structure is appropriate, or whether Bands 2 and 3 should be    
      combined, given the closeness of the proposed figures: if you favour combining the bands, we welcome suggestions as to how this should be done; and
(v) whether greater certainty is required regarding which cases are suitable for each band of intermediate cases.

Our view is the same as that given in response to question 1, and for the same reasons. Legally aided cases should be exempt from the regime.

Judicial Review

4.    Do you agree with the proposal for costs budgeting in JRs with a criterion of ‘whether the costs of a party are likely to exceed £100,000’? If not, what alternative do you propose?

We do not think that there is a need to introduce costs budgeting for JRs. It is our experience that costs budgeting has increased, not decreased costs. It is expensive to have a costs budget drawn up and there is at the very least an hour of extra court and advocacy time taken up by a costs management hearing to no real purpose. There is already a disincentive to undertake JR work as the application for permission is “at risk” with regard to costs. Legal aid firms such as CLP who do legally aided judicial review are already subject to stringent costs control by the LAA once likely costs exceed £25,000, via High Cost Case Contracts. The hourly rates for these are pitiful. If we cannot recover full inter partes costs when we win, we will no longer be able to do this important work. Many of our JR cases have gone to the higher courts and changed the law.

The Next Steps

5.  We seek your views on the proposals in this report otherwise not covered in the previous questions throughout the document

Before taking a decision to apply this FRC regime to legally aided cases, a full impact and costs/benefit assessment, which you say you have not done, should be done.

Impact Assessment

6.   Do you have any evidence/data to support or disagree with any of the proposals which you would like the government to consider as part of this consultation?

You should consider the results of the Law Society’s research into legal aid deserts for housing law and the likely impact of your proposals on the already dire situation set out in that document.

We would happily share our data with you showing how efficient we already are, our profit margins and accounts but this is not appropriate for a document which may become public. You will have data as to the results that we achieve in our defended possession proceedings via the LAA. Our account number is 1C141C. It is clear that nobody has thought through the implications of these reforms for legal aid cases, which is disappointing. We are happy to talk to you about this.

You should take into account the requirements imposed on us by the Legal Aid 2018 Contract Specification.


7.    What do you consider to be the equalities impacts on individuals with protected characteristics of each of the proposed options for reform? Please give reasons.

Many tenants that we represent have the protected characteristic of disability. There is no evidence that you have even considered this. If firms such as ours cease to exist, as they will if these reforms are extended to legally aided possession claims, then these tenants will suffer indirect discrimination. There is no legitimate aim to justify this, as the consultation paper says that the number of legally aided cases is minimal. They could therefore be exempted from the scheme without interfering with the achievement of a legitimate aim.

8.   Do you agree that we have correctly identified the range of impacts under each of the proposed reforms set out in this consultation paper? Please give reasons.

No, for the reasons given in response to question 9

9.   Do you agree that we have correctly identified the extent of the impacts under each of these proposals? Please give reasons and supply evidence as appropriate

There is no evidence that you have considered the impact of these proposals on those facing possession proceedings who lack the mental capacity to litigate. We are often instructed by the Official Solicitor where a defendant lacks capacity to litigate. Acting for these extremely vulnerable individuals is time consuming and often very difficult. If the OS sought to instruct us in a case covered by this regime we would have to decline instructions. We could not take the chance that it might be allocated to the fast track. These vulnerable individuals who have a protected characteristic (disability) would suffer indirect discrimination if firms such as ours go out of business or have to decline instructions.

Those facing possession proceedings with a protected characteristic would suffer indirect discrimination and an interference with their Article 8 rights if firms such as ours cease to take on their cases due to FRC. These are a group of court users – legally aided people with a protected characteristic: age, disability, race, sex, who are facing possession proceedings – whom you have not considered. It cannot be a proportionate means of achieving a legitimate aim to include legally aided possession proceedings in the FRC regime, when, as you state in the consultation document,  there are so few legally aided litigants in  civil cases, but when  the adverse effect of these proposals on them are enormous. You have not even carried out a cost/benefit analysis in relation to them, much less a proportionality assessment.

10. Are there forms of mitigation in relation to that we have not considered?

Yes. Exempt legally aided cases, and cases being brought against a defendant who lacks capacity to litigate, from the scheme

The Community Law Partnership
5 June 2019