Introduction

The case of CR, R (On the Application Of) v Director of Legal Aid Casework & Ors ([2023] EWCA Civ 717) adjudicated by the England and Wales Court of Appeal (Civil Division) on June 23, 2023, addresses significant issues surrounding the modification of Costs Capping Orders (CCOs) under the Criminal Justice and Courts Act 2015 (CJCA). The appellant, CR, sought to have a previously issued CCO set aside ab initio, arguing that the subsequent grant of legal aid rendered the CCO unnecessary from the outset. The Court of Appeal's decision provides critical insights into the judicial discretion exercised in varying CCOs and the balance between legal certainty and access to justice.

Summary of the Judgment

The appellant, represented by litigation friends and legal charities, initially had a CCO imposed under section 88 of the CJCA, which capped her liability for costs and imposed reciprocal limits on the respondent's (Director of Legal Aid Casework) liability. Subsequent to this order, CR was granted backdated legal aid, which provided costs protection, making the initial CCO potentially redundant. The appellant sought to have the CCO varied to apply only prospectively rather than being set aside entirely. The High Court initially varied the CCO prospectively, which the appellant appealed, contending that it should have been set aside ab initio.

Upon review, the Court of Appeal upheld the High Court's decision to vary the CCO prospectively. The appellate judges, including Lady Justice Nicola Davies, emphasized the importance of maintaining legal certainty and the reciprocal nature of CCOs. They reasoned that retrospective variation would undermine the legislative intent behind CCOs, which aim to balance access to justice for claimants with financial protection for respondents.

Analysis

Precedents Cited

The judgment extensively referenced several key cases to contextualize the decision:

• R(E) v JFS [2009] UKSC 1 - Emphasized the importance of allowing publicly funded representatives to recover costs at inter partes rates to prevent financial unsustainability.
• R (Elan-Cane) v Secretary of State for the Home Department [2020] EWCA Civ 363 - Highlighted the legislative intent behind CCOs to promote access to justice.
• Anti-Trafficking and Labour Exploitation Unit and Another v The Secretary of State for Justice ("ATLEU") [2022] EWHC 1962 (Admin) - Discussed the exceptional circumstances required for retrospective variation of CCOs.
• Western Sahara Campaign UK v Secretary of State for International Trade [2021] EWHC 1756 (Admin) - Outlined principles for setting reciprocal caps in CCOs.
• CR (Harvey) v Leighton Linslade Town Council [2019] EWHC 760 (Admin) - Addressed material non-disclosure as grounds for varying CCOs.

Legal Reasoning

The Court of Appeal focused on several pivotal aspects:

• Jurisdiction to Vary CCOs: It acknowledged that courts possess the authority under CPR 46.19 to vary CCOs but emphasized that such variations should be reserved for exceptional circumstances.
• Legislative Intent: The CJCA's provisions aim to balance access to justice for claimants undertaking public interest litigation with the protection of respondents against disproportionate cost liabilities. This mutual protection fosters legal certainty, allowing both parties to understand their financial exposures.
• Prospective vs. Retrospective Variation: The judges underscored that retrospective modification could disrupt the established cost balance and reciprocity, potentially leading to unfair financial burdens on respondents. Therefore, variations should generally be prospective unless exceptional factors warrant otherwise.
• Impact of Legal Aid Grant: The appellant's subsequent receipt of backdated legal aid indicated that the original reasons for the CCO were no longer present from a certain date. However, rather than invalidating the entire CCO from its inception, the court found it appropriate to limit its applicability to costs incurred before the variation.
• Public Policy Considerations: Maintaining the reciprocal nature of CCOs and preventing "costs windfalls" were deemed essential to uphold public policy goals embedded in the CJCA.

Impact

The judgment reinforces the judiciary's cautious approach to altering financial orders once established, particularly in the context of CCOs. It underscores that while courts retain the discretion to modify CCOs, such actions are bounded by the necessity to preserve legal certainty and reciprocation between parties. Future cases will likely adhere to this precedent, opting for prospective variations unless incontrovertible exceptional circumstances are present.

Additionally, the decision clarifies that comebacks to CCOs due to subsequent grants of legal aid should not disrupt the initial cost balance unless absolutely necessary, thereby reinforcing the stability and predictability of legal cost management in judicial review proceedings.

Complex Concepts Simplified

Costs Capping Order (CCO)

A Costs Capping Order (CCO) is a court order that limits the amount of legal costs one party can be liable to pay to the other in judicial review proceedings. Under the CJCA 2015, CCOs are designed to balance the financial risks for both claimants and respondents in public interest cases.

Prospective vs. Retrospective Variation

- Prospective Variation: The CCO is modified to apply only to costs incurred after the variation order is made. Existing capped costs remain unaffected.
- Retrospective Variation: The CCO is altered to apply to costs incurred both before and after the variation order, potentially disrupting the original cost balance.

Inter Partes Rates

Inter partes rates refer to the standard legal fees that solicitors can charge clients, typically higher than the rates set by governmental bodies like the Government Legal Department (GLD). Recovery at inter partes rates allows legal representatives to sustain their practices financially.

Judicial Review

Judicial review is a process by which courts oversee the actions of public bodies to ensure they act lawfully, rationally, and fairly. It is a crucial mechanism for upholding rule of law and accountability.

Public Interest Proceedings

Public interest proceedings are legal actions brought to resolve issues of general public concern rather than private disputes. They often involve matters affecting large sections of the community or significant societal interests.

Conclusion

The Court of Appeal's decision in CR v Director of Legal Aid Casework & Ors [2023] EWCA Civ 717 reinforces the structured and cautious approach courts must adopt when considering variations to Costs Capping Orders. By upholding the High Court's prospective variation, the appellate judges underscored the importance of maintaining legal certainty and reciprocal cost protections. This judgment highlights that while judicial discretion is broad, it is not unfettered and must align with legislative intent and public policy objectives. Consequently, future applicants seeking modifications to CCOs must demonstrate truly exceptional circumstances to warrant retrospective changes.

This case serves as a pivotal reference point for legal practitioners and parties engaged in judicial review proceedings, elucidating the boundaries within which CCOs can be adjusted. It balances the need for access to justice with the imperative of safeguarding financial predictability, ultimately contributing to the robustness and fairness of the legal system.