Niazi & Ors, R (on the application of) v Secretary of State for the Home Department & Anor

Factual and Procedural Background

On 19 April 2006, the Secretary of State announced the withdrawal of a long-standing discretionary ex gratia compensation scheme for individuals who suffered miscarriages of justice. This scheme had operated alongside a statutory scheme under section 133 of the Criminal Justice Act 1988. The withdrawal was made without prior notice or consultation. Additionally, it was announced that solicitors acting for claimants under these schemes would have their costs paid at a significantly reduced rate. Three individual claimants and seven solicitor firms specialising in these claims sought judicial review challenging the legality of (a) the withdrawal of the discretionary scheme without notice or consultation, and (b) the reduction in solicitors' costs. The challenges were primarily based on grounds of procedural fairness, abuse of power, and irrationality. The court granted permission for the judicial review proceedings.

The individual claimants were preparing or had attempted to make claims under the discretionary scheme but were deemed too late due to the withdrawal. The solicitor claimants had a professional and economic interest in the continuation of the scheme but no entitlement to be instructed in claims. The court accepted their standing to bring proceedings as they were well placed to present the relevant arguments.

The statutory and discretionary schemes were detailed, including their historical development, the role of the Independent Assessor, and relevant ministerial statements. The discretionary scheme operated as an ex gratia scheme without statutory basis, subject to ministerial discretion and judicial review, while the statutory scheme under section 133 implemented international obligations and provided a framework for compensation.

The Secretary of State's announcement on 19 April 2006 included immediate cessation of new applications under the discretionary scheme, introduction of time limits, and reduction of solicitors' costs to the Legal Help rates. The rationale included modernising the system, simplifying processes, and achieving a better balance with victims of crime compensation.

Legal Issues Presented

1. Did the Secretary of State act unfairly or in breach of the claimants' legitimate expectation by abolishing the discretionary scheme without notice or opportunity for representations?
2. Was the Secretary of State in breach of a duty to provide adequate and intelligible reasons for abolishing the discretionary scheme?
3. Was the decision flawed by taking into account an irrelevant consideration, namely balancing compensation with that afforded to victims of crime?
4. Was the Independent Assessor's decision to reduce solicitors' costs to Legal Help rates irrational, unlawfully fettering discretion, or breaching duties of fairness or legitimate expectation?

Arguments of the Parties

Claimants' Arguments

• The withdrawal of the discretionary scheme without notice or consultation was procedurally unfair and an abuse of power.
• There was a legitimate expectation that the scheme would not be withdrawn without consultation or notice.
• The Secretary of State failed to provide adequate reasons and took into account irrelevant considerations.
• The reduction of solicitors' costs to Legal Help rates was irrational, unreasonably low, and frustrated legitimate expectations.
• The reduction in costs could impede access to justice and effective participation in the compensation process.
• Consultation would have allowed claimants and solicitors to make representations for a fairer approach.

Defendants' Arguments

• The discretionary scheme was lawful to withdraw without notice or consultation as it was discretionary and ex gratia.
• No representation or promise existed that the scheme would continue indefinitely or that consultation would be required before withdrawal.
• The claimants were not even bare applicants at the time of withdrawal, thus lacking legitimate expectation of consultation.
• The Secretary of State provided rational and intelligible reasons for withdrawal, including concerns about the scheme's scope and fairness.
• The Independent Assessor has broad discretion under the statute to assess compensation and costs.
• The reduction in solicitors' costs to Legal Help rates was rational, aimed at cost control, and does not prevent claimants from pursuing claims.
• The Assessor conceded willingness to consider representations for higher costs in exceptional cases.
• The Cabinet Office Code of Practice on Consultation does not impose a legal duty to consult in every policy change.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analysed the discretionary nature of the ex gratia compensation scheme and the statutory framework governing compensation for miscarriages of justice. It acknowledged the long-standing operation of the discretionary scheme but found no clear representation or promise that it would continue indefinitely or that consultation would be required before withdrawal. The individual claimants were not even bare applicants at the time of withdrawal, and the solicitor claimants had no stronger legitimate expectation than their clients.

Applying established principles of administrative law and legitimate expectation, the court held that procedural fairness does not necessarily require consultation absent a clear promise or established practice, particularly where the affected parties are unidentified future applicants. The Cabinet Office Code of Practice on Consultation was interpreted as guidance rather than imposing a legal obligation to consult in every policy change.

The court found that the Secretary of State's reasons for withdrawing the discretionary scheme were rational and intelligible, addressing concerns about the scheme's scope, fairness, and overlap with civil remedies. The alleged irrelevant consideration—balancing compensation with victims of crime—was not irrational.

Regarding the reduction of solicitors' costs, the court recognized the broad discretion of the Independent Assessor under section 133 to assess compensation, including legal costs. The previous practice of paying private client rates was not a binding expectation. The Assessor's policy to pay at Legal Help rates, though acknowledged as low, was rational and aimed at controlling costs. The Assessor's concession to consider representations for higher costs in exceptional cases was noted as sufficient to avoid unlawful fettering of discretion.

The court also rejected arguments that the costs decision violated Article 6 ECHR, finding no impediment to access to the compensation process. Overall, the challenges to both the withdrawal of the discretionary scheme and the costs decision failed on grounds of procedural fairness, legitimate expectation, irrationality, and abuse of power.

Holding and Implications

The court DISMISSED the judicial review applications challenging (a) the Secretary of State's withdrawal of the discretionary compensation scheme without notice or consultation, and (b) the Independent Assessor's decision to reduce solicitors' costs to Legal Help rates.

The decision confirms that discretionary ex gratia schemes may be withdrawn without consultation or notice absent clear promises or established practices to the contrary, especially where claimants lack a substantive or procedural legitimate expectation. It affirms the broad discretion of the Secretary of State and the Assessor in managing compensation schemes and costs. The ruling imposes no new precedent beyond applying established principles of administrative law to discretionary compensation schemes and cost assessments.