Darren Smith v The Lord Chancellor & Anor

The Applicant, Darren Smith, has applied for a Non-Party Costs Order [‘NPCO’] under Senior Courts Act 1981, s 51 [‘SCA 1981’] and Civil Procedure Rules, r.46.2 [‘CPR’] against the Lord Chancellor. He also seeks an order for non-party disclosure under SCA 1981, s 34 and Family Procedure Rules 2010, r.21.2 [‘FPR’] requiring the Lord Chancellor/Legal Aid Agency [‘LAA’] to disclose documents relating to the administrative handling of the legal aid certificate in this case. Both orders are sought in the context of proceedings under the Children Act 1989, in which the Applicant sought to prevent his former partner from relocating their child to China. In those proceedings, the respondent mother had been publicly funded and the Applicant personally incurred significant legal costs in successfully contesting the case. The NPCO application is founded solely on alleged procedural failings by the LAA in the grant and continuation of the legal aid funding. There is no challenge to the lawfulness or merits of the funding decision itself. The disclosure application is said to be necessary to resolve the NPCO issues fairly by illuminating how the LAA handled the funding application.

Mr Smith has represented himself in presenting his application and, if I may say so, he has done so very effectively. Despite being a non-lawyer, he has clearly been at pains to understand the legal context within which the application must be determined. During the oral hearing he impressed me by the measured manner of his presentation. It is easy to understand his motivation in bringing the application, which arises from the fact that the respondent was able to present her case, which he regards as being without merit, and to do so with legal representation funded by the LAA. This, in turn, caused him to respond and incur legal fees which, in his view, would not have been necessary if legal aid had not been granted to the respondent.

Despite the positive view that I formed of the Applicant, and despite understanding his motivation, the preliminary issue that falls for determination in this judgment is purely legal. It is whether the court has any jurisdiction to grant the relief against the Lord Chancellor that he now seeks.

At the hearing the Lord Chancellor was represented by Mr Richard Howell. I am grateful to him for his detailed skeleton argument and oral submissions. In like manner to the Applicant, I am grateful to Mr Howell for the clarity and thoroughness of his submissions.

As the primary issue is one of jurisdiction, it was accepted that this should be determined first before any consequent issues of disclosure.

The Director of Legal Aid Casework [‘the Director’], who is not a party to this application, determined on 19 January 2024 that the respondent mother was entitled to civil legal aid under Part 1 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (“LASPO 2012”). The proceedings fell within scope of paragraph 12(1) of Part 1 of Schedule 1 to LASPO 2012, and the Director concluded that the Respondent satisfied (among other things) the merits criteria in the Civil Legal Aid (Merits Criteria) Regulations 2013, reg 68(2)-(2A). Although the decision to grant legal aid was made by the Director, the application for a NPCO is being made against the Lord Chancellor and not the Director or LAA.

The roles of Director and Lord Chancellor are distinct from each other under LASPO 2012, s 37:

LASPO 2012, s 4 gives detail of the relationship between the Director and the Lord Chancellor:

It is of particular note that, by s 4(4)(a), the Lord Chancellor is expressly prohibited from giving directions or guidance in relation to an individual case.

Where the Director has determined that an individual is entitled to civil legal aid, and has not withdrawn their determination, the Lord Chancellor is under a statutory duty to make civil legal aid available to that person (LASPO 2012, ss.1(1) + 9(1)).

LASPO 2012, s 26 (1) imposes a limit on the costs that may be awarded against an individual in receipt of legal aid:

The Civil Legal Aid (Costs) Regulations 2013, [‘the Costs Regulations’] define ‘cost protection’, for the purposes of those regulations and by reference to LASPO 2012, s 26, in reg 2 as:

Reg 6 of the Costs Regulations limits the extent of cost protection:

By LASPO 2012, s 26(5)+(6), provision is made for regulations which, inter alia, require the Lord Chancellor to make payment of costs to a non-legally aided party:

Part 3 of the Costs Regulations, which is made under s 26(5), concerns ‘Costs orders against a legally aided party and the Lord Chancellor’. Regulation 9 sets out the effect of Part 3:

Costs Regulations, reg 10 deals with costs orders against the Lord Chancellor:

Separately, the Family Court has a general jurisdiction (subject to any enactment or rules) to make costs orders under SCA 1981, s 51(1)(ba)

By FPR 2010, r 28.2, the cost provisions in the CPR Parts 44 (except rules 44.2(2) and (3) and 44.10(2) and (3)), 46 and 47 and rule 45.8 apply to Family proceedings.

By CPR, r 46.2, provision is made for cases where the court is considering making a costs order against a non-party:

As the primary submission at this stage is that of the Lord Chancellor to the effect that the court does not have jurisdiction to grant Mr Smith’s application, it is appropriate to consider that submission first. In summary the Lord Chancellor’s case (drawn from Mr Howell’s skeleton argument) is that:

The Lord Chancellor’s central submission can be put shortly. It is that, although the court has a general jurisdiction under SCA 1981, s 51(1)(ba) to make a non-party costs order, that jurisdiction is subject to the provisions of ‘any other enactment’. Costs Regulations, reg 9(2) is another enactment and that provides that the court may not, save in accordance with Part 3 of those regulations, ‘make an order requiring the Lord Chancellor to pay the whole or part of any costs incurred by a non-legally aided party because the proceedings are relevant proceedings as regards another party’ (emphasis added).

Further, the power to award costs against the Lord Chancellor under Costs Regulations, reg 10 cannot apply as Part 3 only applies ‘where costs protection applies’ (reg 9(1)) and, because civil legal aid was provided to the respondent in the form of legal representation in family proceedings, she did not have the benefit of costs protection (LASPO 2012, s 26(3)).

In support of his primary submission, Mr Howell took the court to the legislative history of the provisions. Originally, there had been no restriction in the nature of Costs Regulations, regs 9(2) and 10. In Kelly v South Manchester HA [1998] 1 WLR 244, Thomas J (as he then was) held that he had a general discretion under SCA 1981, s 51 and could order the Legal Aid Board to pay costs where they had failed to respond in a timely manner to litigation correspondence, thereby causing the adjournment of a trial and wasted costs. Thereafter, the Legal Aid Act 1988 was repealed and replaced with Access to Justice Act 1999, Part 1 of which, at s 11(3), contained the predecessor of LASPO 2012, s 26 and provided for matters concerning costs in legally aided cases to be regulated by subordinate legislation. The Community Legal Service (Cost Protection) Regulations 2000, reg 5 gave a power (as a precursor to Costs Regulations, reg 10) for a court to make an order for costs against the Legal Services Commission (“LSC”). That power was only exercisable where ‘cost protection applies’. Reg 7 of the 2000 regulations provided that:

Mr Howell submitted that the introduction of reg 7 in the 2000 regulations had the effect of reversing the decision of Thomas J in Kelly. He relied upon two Court of Appeal decisions to confirm that submission: R (Gunn) v Secretary of State for the Home Department [2001] 1 WLR 1634 (Lord Phillips of Worth Matravers MR at paragraph 18) and Leeds City Council v Price [2012] 2 Costs LO 242 (Tomlinson LJ at paragraph 8(1)):

Further, in Gunn, the Court of Appeal spoke in plain terms about the clear limits that the regulations placed upon the ability of the court to exercise any wider discretion when considering making a costs order against the Commission:

Mr Howell submitted that reg 9(2) of the Cost Regulations replaced reg 7 of the 2000 regulations. It is worded in similar terms and has the same legal impact by restricting the court’s jurisdiction under SCA 1981, s 51(3) to those circumstances permitted by the regulations.

In H v Northamptonshire County Council [2017] EWHC 282 (Fam), Keehan J, in deciding whether to make a non-party costs order against the Lord Chancellor where maladministration by the LAA had given rise to wasted costs, expressly relied upon the judgment of Thomas J in Kelly. It does not appear that Keehan J was shown the later Court of Appeal decisions of Gunn and Price. He held that reg 9(2) of the Costs Regulations was subject to reg 9(1) and therefore only applied to proceedings where cost protection applied. Mr Howell respectfully submitted that the decision in H v Northamptonshire was per incuriam and should not be followed on this point.

More particularly, Keehan J’s reasoning on this aspect begins at paragraph 58:

Mr Howell squarely submitted that Keehan J was plainly in error in holding that cost protection only applies if a costs order is actually made against the legally aided party. His case is that all legally aided parties, in proceedings to which cost protection applies, are protected by the limit, whether or not a costs order is actually made.

At paragraphs 61 to 63 of his judgment in H v Northamptonshire, Keehan J considered Part 3 of the Costs Regulations, and in particular reg 9(2). He concluded that, as reg 9(1) provides that [Part 3] applies where cost protection applies:

Again, Mr Howell took issue with that conclusion. He submitted that the wording of reg 9(2) would not make sense if it were confined to cases covered by Part 3: ‘The court may not, except in accordance with this Part, make an order requiring the Lord Chancellor …’ [emphasis added]. Reg 9(2) is a free-standing provision and not subordinate to reg 9(1).

Separately, Mr Howell pointed to the limited role that the Lord Chancellor has with respect to individual cases. The decision whether or not to award legal aid to a party is taken by the Director, and does not involve the Lord Chancellor. Where the decision is to award legal aid, the Lord Chancellor has a duty to provide funding to the individual [LASPO 2012, ss 1(1) and 9(1)]. It would, Mr Howell submitted, therefore be remarkable if the Lord Chancellor were to be held liable to pay costs to a non-funded party because of some alleged failure by the Director in deciding that legal aid provision should either be made or continued.

Mr Howell submitted that, despite Mr Smith’s protestations to the contrary, the applicant’s case is based on maladministration by the Director. If that is so, then his remedy might be by way of judicial review, but it does not give rise to a claim for costs against the Lord Chancellor.

In summary, the Lord Chancellor’s case is that where the basis of a claim for non-party costs rests upon a claim that legal aid has been wrongly awarded, or continued, to another party, the court is prevented by reg 9(2) from making any order for costs against the Lord Chancellor. Depending on the circumstances of the case, an applicant in Mr Smith’s position is not without a remedy and may issue judicial review proceedings against the Director and/or make a costs application against the respondent.

Mr Smith claims to be entitled to a non-party costs order against the Lord Chancellor (acting through the LAA) on the basis that the LAA failed to follow mandatory statutory procedures and guidance when deciding to award, or continue to provide, legal aid to the respondent in the Children Act proceedings.

Mr Smith relies squarely upon the decision of Keehan J in H v Northamptonshire on the basis that Keehan J held that reg 9(2) of the Cost Regulations did not oust the court’s jurisdiction to make a costs order under SCA 1981, s 51(1) in a case such as this.

Mr Smith submitted that reg 9(2) is governed by reg 9(1) and is only engaged when ‘cost protection’ applies. He further submitted that reg 9(2) was part of the cost protection regime, which limits the exposure of a legally aided party to pay full costs in a case. As such, reg 9(2) was not intended to cover cases where the LAA itself had behaved improperly or had caused the expenditure of unnecessary costs by another party.

Mr Smith therefore submitted that the court had jurisdiction under SCA 1981, s 51(1) to make an order in his favour. He disputed Mr Howell’s claim that reg 9(2) was another ‘enactment’, for the purposes of SCA 1981, s 51(1). The regulation is in conflict with s 51(1) and the provisions in the section of the statute should take precedence. Alternatively, he put forward an interpretation which avoided any conflict between the two provisions, namely that reg 9(2) only regulates the making of orders where an order has already been made for the legally aided party to pay costs. No such order has been made in the present case and thus s 9(2) does not apply.

Mr Smith addressed the Lord Chancellor’s submission that the words ‘because the proceedings are relevant proceedings as regards another party’ in reg 9(2) mean that no order for costs can be made against the Lord Chancellor ‘because legal aid has been granted’. He submitted that the correct interpretation was that the court should not make an order against the Lord Chancellor where the reason is ‘solely’ because the other party is legally aided. If it had carried a wider meaning there would be no need for the word ‘because’ and the following words. Mr Smith was clear that his claim for costs is not because the respondent was legally aided, it is because the LAA was at fault in operating the legal aid scheme in providing her with legal aid.

In reply, Mr Howell argued against the submission that reg 9(2) only applies in cost protection cases. He repeated that, whilst reg 9(2) complements reg 9(1), it is not subsidiary to it. The purpose of reg 9(1) is to set out the context for Part 3 of the regulations, whereas reg 9(2) can only be read as having more general application.

I have taken the time to set down the arguments of both sides, and the supporting legislation, in some detail out of respect for the care and attention to detail that each displayed in presenting their cases. At the end of the day, however, the analysis comes down to a straightforward reading of the key statutory provisions and can be stated in short terms.

I am persuaded that the effect of the introduction, by the Access to Justice Act 1999, s 11(3), of what is now LASPO 2012, s 26 and, by the 2000 Cost Regulations, reg 7, of what is now Cost Regulations, reg 9(2), was to close down the general use of the power in SCA 1981, s 51 to make costs orders against the Lord Chancellor, as deployed by Thomas J in Kelly. That this is so is clearly demonstrated by the two Court of Appeal authorities of Gunn and Price. It is unfortunate that Keehan J did not appear to have been referred to those two authorities in H v Northamptonshire. In so far as he relied on Thomas J’s decision in Kelly on this point Keehan J was, in my view, wrong to do so.

It is common ground that ‘cost protection’ does not apply in the present case because, by Cost Regulations, reg 6, it does not apply to family proceedings for which legal aid is provided in the form of legal representation. Costs Regulations, Part 3, by reg 9(1), ‘applies where cost protection applies’. Part 3 does not, therefore, apply to the present case, but the wording of reg 9(2) is plainly of wider application and would not make sense if only confined to those cases that were within Part 3. That is because reg 9(2) is clear that ‘except in accordance with this Part’ the court may not make an order requiring the Lord Chancellor to pay costs incurred by a non-legally aided party because the proceedings are relevant proceedings as regards another party. Reg 9(2) thus prohibits the making of such an order against the Lord Chancellor ‘except in accordance’ with the provisions of Part 3.

The general power to order costs under SCA 1981, s 51 is expressly subject to limitation by the provisions of ‘any other enactment’. Costs Regulations, reg 9(2) is another enactment. Mr Smith accepts that, if reg 9(2) applies to this case, then it is in conflict with s 51. That conflict is resolved by the wording of s 51 itself (‘subject to the provisions of … any other enactment’), and the general power is therefore subject to the limitation imposed by reg 9(2).

Further, this case sits squarely within reg 9(2) as the application is being made against the Lord Chancellor ‘because’ legal aid was provided to the respondent. That is essentially what Mr Smith’s application is all about. He is claiming compensation for the cost that he was put to in opposing the respondent’s case. His argument is that, if the legal aid regulations and guidance had been applied correctly, legal aid would not have been awarded, or continued, and he would, as a result, have not been required to pay the costs of his own representation. It is thus a claim made ‘because’ legal aid was granted. The most narrow of distinctions that Mr Smith had sought to draw in submissions (see paragraph 39 above) is not sustainable.

On that basis, reg 9(2) is clear that ‘the court may not’ make a costs order against the Lord Chancellor in favour of a non-legally aided party ‘because the proceedings are relevant proceedings with regard to another party’. There is, thus, no jurisdiction to grant the order against the Lord Chancellor that Mr Smith seeks and the court is prevented from exercising its general discretion under SCA 1981, s 51 in this case.

That conclusion is sufficient to determine this application as, in the absence of any jurisdiction to grant it, Mr Smith’s application must be dismissed. It is not therefore necessary to consider any subsidiary arguments about abuse of process or exercise of discretion.

As a result Mr Smith’s application against the Lord Chancellor must be dismissed.