HRA damages and legal aid: a Pyrrhic exercise?

Human Rights Act 1998 claims and care proceedings

 

A controversy is developing between two Family Division judges – mostly Cobb J and Keehan J – over whether the legal aid statutory charge applies to damages recovered by children and their parents under Human Rights Act 1998 (‘HRA’) s 8. The Lord Chancellor (ie Legal Aid Agency) does not seem to know which way to jump. In P v A Local Authority [2016] EWHC (Fam) she said the charge applied, and lost; and in H (A Minor) v Northamptonshire County Council & Anor [2017] EWHC 282 (Fam) she decided it did not. Both were cases of Keehan J).

 

The problem arises in particular in relation to claims following care proceedings (though it could arise in other family proceedings where the public authority is Child Support Agency, or HM Courts and Tribunal Service (for delay in court proceedings) or LAA itself). In cases where the local authority have breached a European Convention 1950 right (eg taking a child away in breach of respect for family life: HRA and Art 8; as happened in a third case CZ (Human Rights Claim: Costs) [2017] EWFC 11, Cobb J) the parties may go on to claim a court declaration that a local authority have acted unlawfully (HRA ss 6 and 7). If the court thinks the public authority have behaved in a way which they regard as unlawful, then the court can go on to order them to pay damages to a claimant (HRA s 8(1)).

 

A parent and child(ren) will have legal aid in the care proceedings (it is always, for practical purposes, automatic in care proceedings). In addition – and separately, as will appear – they may each have legal aid for their damages claim.

 

Legal aid statutory charge

 

This is all relatively straightforward (save for an issue to be dealt with on another day: that family courts have no power to award damages or to deal with civil proceedings so should not be dealing with these cases: HRA s 8(2)); save that the LAA come into it. They have granted legal aid for the care proceedings and exercise their statutory charge on damages claimed in the HRA proceedings. In some cases, they say (eg in this instance the claimant is a 6 month old child) something like the following:

 

  • You (the child) have had legal aid for the care proceedings and your lawyer’s bill is (say) in excess of £10,000;
  • Your HRA damages awarded by the family courts are £7,500; and the local authority agree they’ll pay your costs on the HRA claim.
  • £7,500 is less than £10,000 in your care proceedings, so we’ll keep it; and, though the court said you should have the cash and your costs on the HRA proceedings, you will have nothing. (Your lawyers will be paid and – on that example – all you have done is to increase your barrister’s and solicitor’s 2017 income. For you it is a Pyrrhic victory: ie you’ve got nothing for all the trouble you suffered.)

 

Solicitor’s lien for costs from property recovered or preserved ‘in the proceedings’

 

So how can this be? It is an old rule of law that if a solicitor acts in a case (the same doesn’t necessarily apply to barristers) and s/he recovers or holds onto property or money for a client, the solicitor can take the fees for acting in the case – the ‘proceedings’ – from the money recovered; or charge it – like a second mortgage – on the property. This applies to ordinary civil proceedings, or to legal aid cases; and it is now known as ‘the statutory’ charge.

 

Recent cases where the statutory charge has applied in legal aid cases are the following. As can be seen the Lord Chancellor – who is responsible for the LAA which runs legal aid – are as follows:

 

  • P v A Local Authority (above) where the LAA had said, in separate HRA damages proceedings (for which they refused legal aid) and which followed funded wardship proceedings, that the charge applied. Keehan J said no.
  • CZ (above) where a HRA damages claim was said by Cobb J, on application by the LAA, to attract the charge for the parallel care proceedings.
  • H v Northants (above) late in the proceedings, the LAA conceded that the charge did not apply, where they had issued a separate certificate for the damages proceedings.

 

When can the statutory charge apply?

 

The statutory charge has been part of legal aid legislation since the earliest Legal Aid Act 1949. It puts the Lord Chancellor in the same position that lawyers would be under the solicitor’s charge.

 

The legal aid charge is defined by Legal Aid Sentencing and Punishment of Offenders Act 2012 s 25(1) as follows:

 

(1) Where civil legal services are made available to an individual under this Part, the amounts [due to Lord Chancellor] are to constitute a first charge on – (a) any property recovered or preserved by the individual in proceedings, or in any compromise or settlement of a dispute, in connection with which the services were provided (whether the property is recovered or preserved for the individual or another person).

 

To define whether the charge applies four questions must be asked. These are extracted from Hanlon v The Law Society [1981] AC 124 (the Law Society was then responsible for legal aid); thought Hanlon seems not to have been referred to in any of the above four cases. Hanlon related to the charge under Legal Aid Act 1974 s 9(6); but for all material purposes the charge is defined in the same way in s 25(1), so Hanlon can be treated as the law today.

 

In Hanlon a nurse petitioner (represented throughout by the then Nicholas Wall) had legal aid for matrimonial proceedings where she had also been involved in defended divorce and custody proceedings; and in which she (famously at the time: Hanlon v Hanlon [1978] 1 WLR 592) secured an outright transfer of her former matrimonial home. How much of the costs applied to the charge; and could the Law Society postpone its operation? Of the second question, the House of Lords said they had a discretion to postpone. On the first, the following issues arose:

 

Does the statutory charge apply in legally aided proceedings?

 

(1) What are the ‘proceedings’? – The starting point for definition of the extent of the charge is: what is the scope of the legal aid certificate (ie the proceedings which it covers, and see Lord Scarman in Hanlon v Law Society at 186G-H). The scope of a legal aid certificate is akin to the solicitors’ retainer for work to be done for a client. If there are separate proceedings (eg for ‘civil proceedings’ under HRA 1998 s 8(2) (below)) then different principles for definition of s 25(1)(a) ‘proceedings’ apply.

 

(2) What is ‘the property’? – ‘Property’ is any property or money (eg a lump sum in matrimonial proceedings or damages) which was in issue between the parties in the proceedings (or included as a ‘compromise or settlement’ (s 25(1)(a)) of any proceedings: Van Hoorn v The Law Society [1984] FLR 203).

 

(3) Was the property in issue in the proceedings (or part of a ‘compromise or settlement’ of the case)? – Whether the charge applies to particular property turns on whether or not it was in issue in the proceedings for which the certificate was granted (Watkinson v Legal Aid Board [1991] 2 FLR 26 CA). ‘What has been in issue is to be collected as a matter of fact from pleadings, evidence, judgment and/or order’ (per Lord Simon in Hanlon v Law Society at 180H). It is the proceedings (ie the lis) between the parties which defines the proceedings. In the case of HRA 1998 s 8(1) damages cases, the lis is between the claimant (parents and/or child) and the local authority; and the costs (subject to the ‘separate proceedings’ point below) can be the costs only in the ‘civil proceedings’.

 

(4) Was the ‘property recovered or preserved’? – Property is only ‘recovered or preserved’ if it is in issue in, or part of a compromise of, proceedings: ‘A person recovers or preserves in legal proceedings only what is in issue between the parties’ (Lord Scarman in Hanlon at 187G). Property is recovered if a person takes proceedings to convert it to his own use – eg a property adjustment order (Curling v Law Society [1985] FLR 831, CA); property is preserved if a person successfully resists a claim to his property – eg an order for sale or (Parkes v Legal Aid Board [1997] 1 FLR 77, CA).

 

Separate proceedings; civil proceedings

 

Only proceedings which are covered by a legal aid certificate are subject to the charge (Hanlon v Law Society (above)). So what happens where – as under review here – care proceedings and HRA 1998 damages are involved? Can the statutory charge apply to costs in the children proceedings, attaching to the HRA damages? Yes says Cobb J (CZ (above)); no said the Lord Chancellor in H v Northants (above). Taking account of Hanlon v Law Society the question turns on whether there are separate proceedings. This is not an issue which has been addressed clearly by the family judges.

 

But why are ‘family judges’ dealing with all this at all? HRA 1998 s 8(1) and (2) says that the court can award such damages ‘within its powers as it considers just and appropriate; but ‘(2) … damages may be awarded only by a court which has power to award damages… in civil proceedings’. Family courts have no power to deal with non-family ‘civil proceedings’ (the types of case they can take on are listed in Senior Courts Act 1981 Sch 1 para 3). In Anufrijeva v Southwark London Borough Council [2003] EWCA Civ the Court of Appeal said applications should be made in the Administrative Court; but certainly it must be under Civil Procedure Rules 1998).

 

As I read HRA s 8(1) and (2), family courts judges should not be dealing with these cases at all. Legal aid for care proceedings in the family courts is one thing. Legal aid for damages should be in a separate court under CPR 1998. Proceedings should be by separate judicial review application in the Administrative Court.

 

Statutory charge and HRA damages in ‘separate proceedings’

 

If the steps derived from Hanlon v Law Society are followed; and the proceedings are indeed separate – which, in the case of a damages claim under HRA s 8, they must be – then damages are exempt from the statutory charge for care proceedings. It can arise only to the extent there is any short-fall between costs payable by the defendant and what is paid by LAA for the legal services.

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6 thoughts on “HRA damages and legal aid: a Pyrrhic exercise?

  1. Reblogged this on | truthaholics and commented:

    As I read HRA s 8(1) and (2), family courts judges should not be dealing with these cases at all. Legal aid for care proceedings in the family courts is one thing. Legal aid for damages should be in a separate court under CPR 1998. Proceedings should be by separate judicial review application in the Administrative Court.”

  2. Pingback: Legal aid statutory charge and care proceedings | dbfamilylaw

  3. A parent and child(ren) will have legal aid in the care proceedings (it is always, for practical purposes, automatic in care proceedings). In addition – and separately, as will appear – they may each have legal aid for their damages claim.

  4. Pingback: Legal aid statutory charge Part 3: avoidance and evasion | dbfamilylaw

  5. Pingback: Offers to settle: HRA damages claims and CPR Part 36 – Part I | dbfamilylaw

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