Legal aid statutory charge and care proceedings

No application to family courts proceedings

 

Following on from HRA damages and legal aid: a Pyrrhic exercise?  a narrow question has arisen over whether the Family Court has power to award damages. More to the point: has the Family Court administration got power to permit issue of ‘civil proceedings’ under Human Rights Act 1998 (‘HRA’); and can family judges award damages?

 

These questions arise immediately where parents or children have been pursuing claims for HRA damages arising from local authority claims, often in relation to care proceedings in the family courts. In the above article I have expressed doubts as to whether this is correct. It is important because in some cases the Legal Aid Agency (‘LAA’) are simply mopping up damages received by parents or their children and setting it against the legal aid in the care proceedings. If they have been allowed to do this by children’s, or parents’, lawyers, I believe this to be unlawful; and if I am right, the LAA should pay the money back.

 

The issue arises from Human Rights Act 1998 (‘HRA’) s 8, as relevant for present purposes, says:

 

8 Judicial remedies

(1) In relation to any act (or proposed act) of a public authority which the court finds is (or would be) unlawful, it may grant such relief or remedy, or make such order, within its powers as it considers just and appropriate.

(2) But damages may be awarded only by a court which has power to award damages, or to order the payment of compensation, in civil proceedings.

 

Most people reading that would probably say that its ordinary English words mean that in the case of an ‘unlawful’ act (which refers back to maladministration by a public authority under HRA ss 6 and 7 under European Convention 1950) a court can make an appropriate order ‘within its powers’. If it chooses to make an order for damages the court so doing must have ‘power to award damages… in civil proceedings’ (s 8(2)).

 

At the time of the coming into operation of HRA a family law text-book Family Law and the Human Rights Act 1998 (Swindells et al, 1999) considered s 8(1) and (2) to mean:

 

2.20  A damages award can be made only by a court with jurisdiction to do so (HRA 1998 s 8(2)). As it is doubtful that family courts have such jurisdiction, if damages are sought the claim will have to be made in the civil courts.

 

6.70  … The family courts do not in any event have any power to make awards of damages even were they to be persuaded that Convention rights had been violated and damage suffered as a result.

 

I am not aware of any judge saying in terms that that was wrong; though a lot of HRA water has flowed under the bridge since then. I know of no family law case which deals with the meaning of s 8(2) (I have searched the FLR assisted search facility on HRA s 8).

 

Application in family proceedings

 

First, what proceedings can be issued in family courts? In the family courts the form of court proceedings is defined by Courts Act 2003 s 75, which takes you to Matrimonial and Family Proceedings Act 1984 and, eventually, you arrive at Senior Courts Act 1981 Sch 1 para 3. This defines the list of forms of proceedings – ‘family business’ – which can be issued in the courts under Family Procedure Rules 2010. There is no mention of Human Rights Act 1998 claims in Sch 1.

 

That is why, for example, you cannot claim a share in your (unmarried) partner’s property, if it is in his or her sole name (Trusts of Land and Appointment of Trustees Act 1996 s 14), or claim against your dead parent’s or spouse’s property (if they don’t leave you enough: Inheritance (Provision for Family and Dependants) Act 1975). All family lawyers know that: you have to issue ‘civil proceedings’ – that word again – under CPR 1998. And that is so even if, in the case of your partner’s property s/he is parent of your child, and you are making a claim for property for the child in FPR 2010 proceedings under Children Act 1989 Sch 1.

 

In short, just because it is a family matter – suing your grand-mother for specific performance of an agreement or making a claim against your boy-friend for property in his name – does not mean you can apply in the family courts if your case does not come within Sch 1. And it may be good practice form a legal aid point of view if your lawyer does not attempt to do so (see below).

 

Family courts are quite used to case managing cases – at least in theory – so that CPR 1998 (TOLATA proceedings) are dealt with alongside FPR 2010 proceedings (and see eg bankruptcy court and money proceedings: Arif v Zar and anor [2012] EWCA Civ 986). They can also manage care cases so that issues are split: threshold in care proceedings (CA 1989 s 31(2)) from welfare issues if the care threshold is achieved by the local authority applicant.

 

So why not split and case manage (as need be) the separate issues which arise on a FPR 2010 care case; and a HRA damages CPR 1998 ‘civil proceedings’ care case? The answer is, in my view: none at all. It follows the law (always a good idea for a judge to follow the law). And – a quite separate point – it is certainly good practice from the legal aid point of view (see separate article of Avoiding the legal aid statutory charge).

 

Order in family proceedings

 

It is said that Matrimonial and Family Proceedings Act 1984 s 31E helps. This provides, as relevant here:

 

31E Family court has High Court and county court powers

(1)   In any proceedings in the family court, the court may make any order –

(a)which could be made by the High Court if the proceedings were in the High Court, or

(b)which could be made by the county court if the proceedings were in the county court.

(2) In its application to a power of the High Court to issue a writ directed to an enforcement officer, subsection (1)(a) gives the family court power to issue a warrant, directed to an officer of the family court, containing provision corresponding to any that might be contained in the writ.

(3) Subsection (1) is subject to section 38(3) of the County Courts Act 1984.

 

Subsection (3) means that the Family Court, like the County Court, cannot make orders on an application for judicial review (which may prove relevant in a HRA context; but that is for another day).

 

MFPA 1984 s 31E is in a long line of legislation which endows lesser courts with the powers of higher (or, in this case, parallel) courts, as does County Courts Act 1984 s 38. Section 31E is based on s 38 (and see County Court Remedies Regulations 2014). Traditionally s 38 was relied on to enable county courts (including those then dealing with family proceedings) to make inherent jurisdiction orders (eg injunctions) which they did not have; and, for example, it was used to enable district judge’s to order that they should sign documents (Senior Courts Act 1981 s 39).

 

That is s 31E enables orders to be made at the conclusion of, or during the course of (interim orders), proceedings. It does not add to the jurisdiction defined by SCA 1981 Sch 1; for if it did, family lawyers would use family courts for any application (eg constructive trust, breach of contract and s 14 proceedings, as you can do in county courts); suing for damages for personal injuries (which county courts certainly have powers to order) and so on. Plainly this cannot happen. That would be massively to extend the jurisdiction under SCA 1981 Sch 1 which is not what Parliament envisaged.

 

‘Power to award damages… in civil proceedings’

 

So what does HRA s 8(2) and its reference to ‘civil proceedings’ mean? In 1997-8 Parliament deliberately decided to treat civil and ‘family’ proceedings separately. Civil Procedure Act 1997 (neither does that Act nor HRA 1998 define ‘civil proceedings’) set up the machinery for CPR 1998.

 

The term ‘civil proceedings’, for rule-making purposes, was specifically defined to exclude family proceedings.  CPR 1998 could not be used for family proceedings as defined (now) by Courts Act 2003 s 75 (CPR 1998 r 2.1(2)). Section 75 sets up the machinery for making family proceedings rules separate from CPR 1998, which eventually lead to FPR 2010 (cf Family Proceedings Rules 1991 which were subject to the provisions of the then civil proceedings rules). In HRA s 8(2) the reference to ‘civil proceedings’ is likely to be the post 1997-8 definition, rather than the term (ie most non-criminal proceedings) which operated till then. On that logic, proceedings under s 8(2) as ‘civil proceedings’, were intended by Parliament to be issued under CPR 1998, not as or within family proceedings.

 

The reference to Courts Act 2003 s 75, at s 75(3), takes the reader to MFPA 1984 s 32 (which defines ‘family business’) which is defined by SCA 1981 s 61 and Sch 1 para 3 (as explained above). Para 3 makes no reference to claims under s 8(1), which is unsurprising since damages claims are not always immediately associated with ‘family business’ – there are many other forms of proceedings which may lead to a claim under s 8(2). It seems likely that s 8(2) did not assume that family courts would adopt a ‘power to award damages’; and that is the view taken by text-book writers at the time of introduction of HRA 1998 (eg Swindells, above).

 

‘Separate proceedings’ in judicial review: Anufrijeva

 

Claims should be by judicial review – which cannot be in the county courts (see CCA 1984 s 38(3) above. This is explained by the Court of Appeal in Anufrijeva and anor v Southwark London Borough Council [2003] EWCA Civ (judgment: 16 October 2003). This is by CPR 1998 Pt 54 (which is not difficult). This will be in writing, and – in care proceedings – based on facts already found in family courts. Issue estoppel will mostly narrow the factual proof. This need not be a difficult exercise, not one which is beyond the wit of most judges to case manage. From a legal aid point of view it is very important. There will then be no doubt that the legal aid statutory charge cannot apply to damages.

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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.