Osbornes Wins Judicial Review on Legal Aid Fees

William Ford

Osbornes successful in judicial review of Lord Chancellor over legal aid fees for Welfare Benefits

On 28 January 2025 the High Court approved a consent order in relation to a judicial review claim brought by Osbornes concerning the rates paid by the Lord Chancellor in relation to Welfare Benefits legal aid work.

Background

The scope of Welfare Benefits work was significantly cut by the previous government following the introduction of the Legal Aid, Sentencing, and Punishment of Offenders Act 2012 (“LASPO”). Post LASPO legal aid for Welfare Benefits only remains in scope for appeals at the Upper Tribunal stage and higher Courts. This means that no legal aid is available for early advice or for appeals to the First Tier Tribunal.

These changes resulted in a significant decrease in the number of Welfare Benefits cases taken on by legal aid providers, as well as the creation of advice deserts for this area of law in many parts of the country. However, the need for Welfare Benefits advice has, if anything, increased, with complex changes being made to the social security system, such as the introduction of Universal Credit.

The majority of legal aid work is intended to be carried out under the Legal Help scheme (also known as “Controlled Work”), which covers advice and assistance, but does not cover representation at Tribunal hearings. It is possible to apply for a legal aid certificate (also known as “Licensed Work”) via a grant of exceptional case funding (“ECF”) to cover representation at a Tribunal, but there is no automatic entitlement to legal aid in that scenario, and a decision granting ECF has to be made by the Legal Aid Agency (“LAA”).

The funding regime for Legal Help work is by way of payment of a fixed fee, and the fixed fee varies depending on the area of civil legal aid. Historically it had always been possible for a legal aid provider to claim their actual incurred costs (at legal aid rates), if the fees incurred on a case exceeded three times the fixed fee. In Welfare Benefits cases the fixed fee was £150. That meant that if the actual costs of the case exceeded £450 a legal aid provider could claim their actual costs.

Following LASPO the government enacted the Civil Legal Aid (Remuneration) Regulations 2013 (“the Remuneration Regulations”). This confirmed a fixed fee of £150 and escape threshold of £450 for Welfare Benefits work. However, in 2014 and 2016 the LAA tendered for Welfare Benefits contracts in specific regions of the country (namely the North, Southwest, and Wales procurement areas). In relation to those legal aid contracts a fixed fee of £208 was introduced, but, crucially, with no possibility of an escape fee. This meant that whatever the costs incurred on a case were, in terms of the number of hours incurred, the fee would always be £208.

The LAA then tendered for the 2018 Standard Civil Contract. However, the Remuneration Regulations were not updated to apply the £208 fixed fee to work carried out under the 2018 contract, so providers were able to continue to claim a fixed fee of £150 with an escape threshold of £450. Eventually the government amended the Remuneration Regulations to apply the £208 fixed fee to the 2018 contract with effect from 1 April 2023.

In the run up to the implementation of the 2024 Standard Civil Contract (which took effect from September 2024), Osbornes, along with the Legal Aid Practitioners Group (“LAPG”), made requests to the LAA and the Ministry of Justice to allow legal aid providers to be allowed to claim an escape fee under the 2024 contract.

Notwithstanding these requests the government enacted the Civil Legal Aid (Standard Civil Contract – Miscellaneous Amendments) Regulations 2024 (“the 2024 Regulations”), which applied the £208 fixed fee only regime to the 2024 Contract with effect from 23 September 2024.

Legal Challenge

The removal of the escape fee threshold for Welfare Benefits made Welfare Benefits legal aid work for Osbornes entirely unprofitable and unsustainable. In such circumstances, at best, Osbornes would have had to substantially reduce the amount of Welfare Benefits legal aid it undertook, or, potentially, cease doing this area of work altogether.

Osbornes therefore took the decision to challenge the 2024 Regulations and bring legal action against the Lord Chancellor (who has overall responsibility for legal aid). We gathered evidence from other Welfare Benefits providers and analysed the statistical evidence demonstrating the decline in Welfare Benefits legal aid cases and providers, as well as the issues created for access to justice. A detailed pre-action letter was sent on 6 November 2024, and a claim was issued at the High Court on 29 November 2024.

Following the issue of proceedings we were able to reach settlement and on 28 January 2025 the High Court approved a consent order reached between Osbornes and the Lord Chancellor. The Lord Chancellor has agreed to introduce an escape fee mechanism for Welfare Benefits cases with a fixed fee of £208. The government aims to lay regulations to this effect by the end of April 2025.

Upon this basis the judicial review claim was withdrawn and the Lord Chancellor agreed to pay Osbornes’ costs of bringing the claim.

Outcome

This means that once amending regulations to the Remuneration Regulations are passed, legal aid providers will again be able to claim the actual costs incurred in bringing a Welfare Benefits case, where the costs exceed three times the fixed fee.

William Ford, one of the solicitors who represented Osbornes comments:

“We are very pleased that the Lord Chancellor has taken the step to settle this case and reinstate an escape fee mechanism for Welfare Benefits cases. There remain many challenges in respect of the viability of legal aid provision for this area of law, but this decision goes some way towards ensuring that legal aid providers are able to continue to provide vital representation to vulnerable clients with benefit problems. We hope that the government will take the opportunity as part of the Review of Civil Legal Aid to restore scope for early advice and representation before the First Tier Tribunal for this area”.

Osbornes were represented by William Ford and Emma Vincent-Miller, and instructed Chris Buttler KC, Eleanor Mitchell and Emma Foubister at Matrix Chambers as counsel.

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The Law Society Gazette covered this case. Click here to read the article.