The Law Society, R (On the Application Of) v The Lord Chancellor

Factual and Procedural Background

This judicial review concerns a decision by the Lord Chancellor to reduce legal aid fees payable under the Litigators' Graduated Fees Scheme ("the Scheme"), which governs remuneration for solicitors defending individuals prosecuted in the Crown Court. The challenged decision, made on 24 October 2017 and implemented by the Criminal Legal Aid (Remuneration) (Amendment) Regulations 2017 ("the 2017 Regulations"), reduced the maximum number of pages of prosecution evidence ("PPE") counted for fee calculation from 10,000 to 6,000. This change means that cases with more than 6,000 PPE are remunerated as if only 6,000 pages were served, potentially disregarding additional complexity.

The rationale for the decision was to address a cost increase attributed to a 2014 judicial decision (R v Napper) that broadened the circumstances in which electronic evidence could be counted as PPE, leading to higher Scheme expenditure. The Lord Chancellor sought to restore expenditure to pre-Napper levels by lowering the PPE cap.

The Law Society, representing solicitors, challenged the decision on four grounds: procedural unfairness in consultation, irrationality due to flawed assumptions and methodology, disproportionate interference with the right of access to justice, and breach of legitimate expectation regarding fee reductions pending a review.

The claim was initiated on 24 January 2018. Procedural directions were given for a rolled-up hearing with evidence served by both parties, including expert econometric reports submitted without prior court permission. The court addressed the admissibility of such expert evidence alongside the merits of the claim.

Legal Issues Presented

1. Whether the consultation process preceding the decision was procedurally fair, specifically regarding disclosure of key analysis underpinning the decision.
2. Whether the Lord Chancellor's decision was irrational or unreasonable, particularly in reliance on a flawed statistical analysis estimating cost increases due to the Napper decision.
3. Whether the 2017 Regulations constitute a disproportionate and unjustified interference with the common law right of access to justice.
4. Whether the decision breached any legitimate expectation that no fee reductions would occur prior to a promised review.

Arguments of the Parties

Appellant's Arguments (Law Society)

• The consultation was procedurally unfair because the Ministry of Justice did not disclose the detailed statistical analysis (the LAA analysis) estimating a £33 million increase in expenditure attributable to the Napper decision, denying consultees an opportunity to respond intelligently.
• The decision was irrational, relying on flawed assumptions and a statistical method that failed to control for important factors such as trial length and number of defendants, and ignored pre-existing cost trends.
• The reduction in PPE cap disproportionately interferes with the right of access to justice by potentially making large Crown Court cases uneconomic for firms, risking inadequate legal representation for defendants.
• The decision breached a legitimate expectation that no further fee reductions would be made before a review promised in a prior Ministerial Statement.

Respondent's Arguments (Lord Chancellor)

• The decision was based on a reasonable and careful quantitative analysis aimed at restoring payments to pre-Napper levels and unlikely to affect the sustainability of criminal defence work.
• The consultation documents, including Impact Assessments, sufficiently indicated the government's position and the estimated cost savings, allowing consultees to infer the existence of underlying analysis.
• The Law Society and other consultees could have requested further information during consultation but did not do so.
• The challenge to the right of access to justice is a matter of predictive judgment, which should only be overturned if irrational; no evidence shows a real risk of systemic unfairness or denial of legal representation.
• The alleged legitimate expectation does not extend to a commitment barring any fee reductions pending review; proper consultation was the relevant expectation.
• The expert evidence submitted by the Law Society and the Lord Chancellor in response was largely inadmissible as it was served without court permission and concerned disputed technical analyses not necessary for judicial review.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
R v Napper [2014] 5 Costs LR 947	Interpretation of PPE definition and inclusion of electronic evidence	Central to the policy rationale; decision broadened PPE definition affecting Scheme costs
R v Secretary of State for the Environment, ex parte Powis [1981] 1 WLR 584	Admissibility and scope of expert evidence in judicial review	Guided the court's approach to expert evidence, emphasizing limits on admissibility
R (UNISON) v Lord Chancellor [2017] UKSC 51	Constitutional right of access to justice and limits on fees	Applied analogy to common law right of access to justice in criminal legal aid context
R v North and East Devon Health Authority ex parte Coughlan [2001] QB 213	Requirements for proper consultation and procedural fairness	Set out criteria for fair consultation, used to assess adequacy of consultation process
R (Moseley) v Haringey London Borough Council [2014] UKSC 56	Prescriptions for fairness in consultation	Endorsed Coughlan criteria as a "prescription for fairness"
R (Howard League for Penal Reform) v Lord Chancellor [2017] EWCA Civ 244	Legal aid and risk of systemic unfairness affecting access to justice	Confirmed that removal of legal aid can be unlawful if it creates unacceptable risk of unfairness
Associated Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223	Standard for irrationality/unreasonableness of administrative decisions	Framework for assessing whether decision was outside range of reasonable responses
E v Secretary of State for the Home Department [2004] EWCA Civ 49	Factual error as a basis for judicial review	Considered whether factual mistakes materially affected decision-maker's reasoning
R (EasyJet Airline Co Ltd) v Civil Aviation Authority [2009] EWCA Civ 1361	Context sensitivity of procedural fairness	Illustrated that fairness depends on case-specific facts and context
Belfast City Council v Miss Behavin' Ltd [2007] UKHL 19	Judicial review of rights interference and court's role in assessing rights violations	Supported court's evaluative role in cases alleging rights violations

Court's Reasoning and Analysis

The court first addressed the admissibility of expert evidence, emphasizing that judicial review generally does not require expert evidence beyond the material before the decision-maker and evidence of the decision-making process. Expert evidence is only admissible if it is reasonably required to explain technical errors affecting the lawfulness of the decision. The court admitted parts of the Law Society's expert report that identified flaws in the Ministry of Justice's analysis and supported claims of procedural unfairness but refused other parts that were contested and unrelated to the core legal issues.

On procedural fairness, the court applied established principles requiring consultation to be conducted when proposals are formative, with sufficient reasons disclosed to allow consultees to respond intelligently. The court found that the Ministry of Justice failed to disclose the key £33 million LAA analysis estimating cost increases due to the Napper decision, a pivotal justification for the decision. This omission deprived consultees of the opportunity to make informed representations and was not justified by any good reason, rendering the consultation process unlawful.

Regarding irrationality, the court analysed the reasoning underlying the decision: the Napper case broadened PPE, causing a £33 million increase in costs, which the reduction in PPE cap would reverse. The Law Society challenged the legal effect of Napper and the validity of the cost increase estimate. The court found the characterization of Napper in the consultation to be simplistic but accepted that the Ministry of Justice had some evidence supporting an increase in PPE counts post-Napper. Crucially, the court concluded that the LAA analysis was methodologically flawed—failing to control for trial length, number of defendants, and pre-existing trends—and no reasonable decision-maker could have relied on it. This flaw rendered the decision irrational.

On proportionality, the court accepted that the policy-maker could adopt a broad measure rather than a narrowly targeted one, and that reducing the PPE cap was not inherently disproportionate. However, the rationality of this measure depended on the flawed LAA analysis, compounding the decision's unlawfulness.

Concerning the right of access to justice, the court recognized the constitutional right to publicly funded legal assistance for defendants who cannot afford representation. It held that to prove illegality, there must be a real risk of systemic unfairness preventing adequate legal assistance. The court found no evidence substantiating such a risk from the 2017 Regulations and rejected the Law Society's challenge on this ground.

On legitimate expectation, the court found no tenable basis for expecting no fee reductions before a review, interpreting the relevant Ministerial Statement as an intention to consult rather than a binding commitment.

Finally, the court considered the remedy. Although the Lord Chancellor argued that disclosure of the LAA analysis would not have changed the outcome (invoking section 31(2A) of the Senior Courts Act 1981), the court rejected this hypothetical reasoning as speculative and inappropriate for judicial determination, emphasizing the decision-maker's discretion and the necessity of proper consultation.

Holding and Implications

The court's final decision was to grant permission to proceed with the claim, declare the Lord Chancellor's decision unlawful, and quash the 2017 Regulations implementing the reduction of the PPE cap.

Holding: The decision to reduce the PPE cap was unlawful due to procedural unfairness in consultation and irrational reliance on flawed statistical analysis.

Implications: The quashing of the 2017 Regulations restores the status quo ante pending further lawful decision-making. No broader precedent was established beyond affirming the necessity of transparent consultation and rational decision-making in public law. The court indicated that further consequential orders would be considered after written submissions, highlighting ongoing procedural management.