A CFA-Lite Can Support Recovery Above Criminal Legal Aid Rates in High Court Contempt Proceedings

Introduction

The Court of Appeal considered whether a successful party receiving criminal legal aid in High Court civil contempt proceedings could recover costs from a privately funded opponent at rates exceeding those in Schedule 4 to the Criminal Legal Aid (Remuneration) Regulations 2013.

The appellant, a solicitor, successfully resisted a committal application which Nicklin J certified as “totally without merit”. Although indemnity costs were ordered in her favour, the courts below limited recovery to criminal legal aid rates. The issue was complicated by the fact that contempt proceedings are civil proceedings procedurally but are treated as “criminal proceedings” for legal aid purposes.

The Court unanimously allowed the appeal. Section 30(1) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (“LASPO”) does not itself disapply the indemnity principle. Nevertheless, the appellant’s pre-existing “CFA-lite” created a genuine liability to her solicitors at the agreed inter partes rate, limited to what was recovered from the opponent. That liability could support recovery above legal aid rates without infringing LASPO.

Background and Procedural History

• The respondent company obtained an injunction preventing entry onto specified land.
• It later sought the appellant’s committal for allegedly breaching that injunction.
• The appellant received criminal legal aid under section 16 of LASPO and instructed solicitors under a CFA-lite providing for an inter partes rate of £400 per hour, while protecting her from personal recovery beyond sums paid by the opponent.
• Nicklin J dismissed the committal application as totally without merit and ordered indemnity costs.
• The Legal Aid Agency assessed remuneration at £28,556.58, while the appellant’s bill claimed £120,292.21.
• Costs Judge Whalan held that recovery was limited to Schedule 4 rates and assessed £20,673.34. Because earlier settlement offers had not been beaten, the appellant was ordered to pay £53,044.65 for the assessment proceedings.
• Sweeting J dismissed the first appeal, but the Court of Appeal allowed the second appeal.

Summary of the Judgment

1. Section 30(1) does not itself disapply the indemnity principle

The Court rejected the argument that section 30(1) of LASPO required the appellant’s legally aided status to be ignored for every aspect of costs recovery. The binding decision in Willis v Redbridge Health Authority [1996] 1 WLR 1228 established that the statutory protection of other parties’ rights and ordinary judicial discretion does not, without more, permit recovery exceeding the amount for which the successful party or the legal aid fund is liable.

2. The CFA-lite independently satisfied the indemnity principle

The CFA-lite created a real, conditional liability to pay the solicitors at £400 per hour where costs were recovered from the opposing party. The fact that the solicitors could not recover more from the appellant than was obtained from the respondent did not make that liability fictitious.

3. The agreement did not contravene LASPO

Section 23(1) prevents a legally aided client from being required to make an out-of-pocket payment for funded services. The CFA-lite did not require such a payment because the relevant funds would come solely from the losing opponent.

Section 28(2) ordinarily prevents legal aid providers from taking payments outside the statutory arrangements. However, paragraph 8.10 of the Standard Crime Contract Specification expressly authorised solicitors to retain inter partes costs exceeding sums paid or payable by the Legal Aid Agency.

4. Ground 2 was not decided

Because the appeal succeeded under the CFA-lite, the Court did not decide whether the enhanced amount assessed by the Legal Aid Agency was independently recoverable under section 28(2).

Analysis

The two relevant rules

Sir Nicholas Underhill distinguished two separate restrictions:

1. The indemnity principle: a successful party cannot recover more in costs than that party is legally liable to pay.
2. The “other payments” rule: a legal aid provider ordinarily cannot receive payment for funded services from sources outside the legal aid scheme unless authorised.

The CFA-lite complied with the first rule by creating a genuine conditional liability and with the second because paragraph 8.10 authorised retention of the additional inter partes recovery.

Different-person and different-amount aspects of the indemnity principle

The Court separated two applications of the indemnity principle:

• Different person: the lawyers are paid by the legal aid fund rather than directly by the litigant.
• Different amount: the opponent is asked to pay more than the legal aid fund must pay.

The statutory “fiction” now contained in section 30(1) permits costs to be awarded despite payment coming from the legal aid fund. It does not, following Willis, automatically permit recovery beyond the amount of the relevant liability. The CFA-lite supplied the additional liability needed to overcome that second limitation.

Why civil and criminal legal aid differed

Regulation 21(3) of the Civil Legal Aid (Costs) Regulations 2013 expressly disapplies the indemnity principle in qualifying civil legal aid cases. No equivalent provision exists in the criminal legal aid regulations. Because contempt proceedings fall within criminal legal aid, that civil provision was unavailable.

The Court regarded this omission as likely an oversight. The CFA-lite nevertheless provided a lawful route to the same practical result in High Court proceedings.

Precedents Cited and Their Influence

Classification of contempt proceedings

King's Lynn and West Norfolk Borough Council v Bunning [2013] EWHC 3390 (QB) established that committal proceedings for breach of an injunction are “criminal proceedings” for LASPO legal aid purposes. It relied on Hammerton v Hammerton [2007] 2 FLR 1133, which held that such proceedings determine a criminal charge for Article 6 purposes.

That classification was accepted in The All England Lawn Tennis Club (Championships) Ltd v McKay [2019] EWHC 3065 (QB) and was common ground in Turk v The Legal Aid Agency [2026] EWCA Civ 469. It explained why the appellant fell under criminal rather than civil legal aid regulations.

The indemnity principle

Harold v Smith [1860] 5 H&N 381 supplied the classic rule that costs compensate for legal liability; they are neither a punishment nor a bonus. The Court accepted that this remains a general rule of costs law.

Daley v Diggers Ltd [1951] 1 KB 661, Starkey v Railway Executive [1951] 2 All ER 902 and Blatcher v Heaysman [1960] 1 WLR 663 held that an opponent should not benefit merely because the successful party was legally aided. However, those decisions principally addressed whether any costs could be recovered, rather than whether recovery could exceed legal aid liability.

The binding effect of Willis

In Willis v Redbridge Health Authority [1996] 1 WLR 1228, the Court of Appeal held that a legally aided party could not recover indemnity-basis costs exceeding the maximum liability under the legal aid scheme then in force.

Although the appellant and the Law Society argued that Willis had been decided per incuriam, the Court rejected that submission. Applying Young v Bristol Aeroplane Company Limited [1944] KB 718, it remained binding. This defeated the argument that section 30(1) alone disapplied the indemnity principle.

Statutory disapplication in civil legal aid

Brawley v Marczynski [2003] 1 WLR 813 explained that amended civil legal aid regulations expressly disapplied both the indemnity principle and restrictions on payments from other sources. As a result, indemnity costs could be awarded to a civil legally aided party.

The present Court treated Brawley as consistent with Willis: recovery above legal aid rates requires either statutory disapplication or a genuine additional liability, such as that created by the CFA-lite.

CFA-lite authorities

Surrey v Barnet And Chase Farm Hospitals NHS Trust [2018] EWCA Civ 451 supplied the accepted definition of a CFA-lite: the client’s liability is limited to costs recoverable from the opposing party.

Thai Trading Co v Taylor [1998] QB 781 supported the conclusion that a conditional liability arising only upon success remains a legal liability capable of satisfying the indemnity principle. The fact that no liability would have arisen upon failure does not invalidate the liability arising upon success.

The Court also considered Gavin Edmondson Solicitors Ltd v Haven Insurance Company Ltd [2018] UKSC 21 and the discussion in Geraghty & Co v Awwad [1999] EWCA Civ 3036, while concluding that the better view was that CFA-lite recovery is compatible with the indemnity principle.

Retrospective changes to costs liability

Radford v Frade [2018] EWCA Civ 119, following Kellar v Williams [2004] UKPC 30, establishes that a receiving party cannot retrospectively increase its liability after a costs order has been made. That principle did not defeat this appeal because the CFA-lite already existed when the costs order was made.

Public policy and legal aid sustainability

In In re appeals by Governing Body of JFS and others [2009] UKSC 1, the Supreme Court stressed that legal aid practices must be able to recover inter partes rates in successful cases; otherwise publicly funded work may become financially unsustainable.

Bean LJ considered the decisions below unjust and contrary to that policy. A party pursuing a totally without merit committal application should not escape the practical consequences of an indemnity costs order merely because the successful opponent was legally aided.

Earlier costs decisions

The courts below relied on Liverpool Victoria Insurance Co Ltd v Khan & others [2022] EWHC B8 (Costs). The Court of Appeal distinguished it because it did not involve a CFA-lite and therefore addressed only whether the statutory regime itself displaced the indemnity principle.

Complex Concepts Simplified

Indemnity principle

A party cannot normally recover more in legal costs than it is legally obliged to pay its own lawyers.

Indemnity-basis costs

A more favourable method of assessing costs than the standard basis. It is distinct from the indemnity principle and does not guarantee payment of the whole bill.

CFA-lite

An agreement under which the client has a liability for legal costs, but the lawyers agree not to recover more from the client than is obtained from the opposing party.

Inter partes costs

Costs payable by one party to another, rather than remuneration paid directly by the client or the Legal Aid Agency.

Per incuriam

A decision made in ignorance of a binding authority or statutory provision. The Court held that Willis could not be disregarded on this basis.

Criminal legal aid in civil contempt

Although contempt proceedings arise within civil litigation, their potentially punitive character means they are treated as criminal proceedings for legal aid purposes.

Impact

• A successful criminal legally aided party in High Court contempt proceedings may recover above Schedule 4 rates where a valid, pre-existing CFA-lite creates the necessary liability.
• Section 30(1) of LASPO does not generally abolish the indemnity principle. Without a CFA-lite or another valid liability, recovery may remain limited to legal aid rates.
• The ruling preserves the effectiveness of indemnity costs as a sanction against abusive or wholly unmeritorious committal applications.
• Legal aid practitioners should ensure that any CFA-lite is lawful, clearly drafted and entered into before costs rights crystallise. Retrospective revocation of legal aid or alteration of liability will not suffice.
• The judgment is specifically concerned with High Court proceedings. Regulation 9 of the Criminal Legal Aid (Remuneration) Regulations 2013 does not apply there; different statutory restrictions may affect proceedings in other courts.
• The decision does not determine that the appellant’s full £120,292.21 bill is payable. The amount remains subject to detailed assessment on the indemnity basis and to the terms of the CFA-lite.

Conclusion

McGivern v MBR Acres Ltd & Ors [2026] EWCA Civ 1202 establishes that a valid CFA-lite can enable a successful recipient of criminal legal aid in High Court contempt proceedings to recover costs above statutory legal aid rates. The agreement supplies the genuine liability required by the indemnity principle, while the Standard Crime Contract authorises the solicitors to retain the excess recovered from the opponent.

The ruling is deliberately narrow: section 30(1) of LASPO does not itself disapply the indemnity principle, and the Court did not decide whether an enhanced Legal Aid Agency assessment is independently recoverable. Its broader importance lies in preventing an unsuccessful private litigant from benefiting from the opponent’s legally aided status and in preserving meaningful costs protection for those defending grave but unfounded contempt allegations.