New legal aid court challenge set to proceedMonday 08 November 2010 by Catherine Baksi


A High Court judge has refused an injunction that could have further delayed the start of the new mental health and public law legal aid contracts – but awarded a protective costs order to enable a legal challenge to the two Legal Services Commission tender processes.

Birmingham firm Public Interest Lawyers and Wirral firm RMNJ launched judicial review proceedings in relation to the public law and mental health bid rounds. They claimed the result of the public law procurement process left experienced firms, which often undertake important and complex test cases, with inadequate case allocations that would adversely affect access to justice.

In relation to the mental health (high-security hospitals only) bid round, the claimants challenged the selection criteria used, which they said the LSC had changed without leaving firms enough time to be able to satisfy them. They also challenged the verification exercise used for applicants in relation to the tender for both the generic and high-security mental health contracts.

The claimants sought an injunction to restrain the LSC from entering into the new contracts, which are due to start on 15 November, until after the conclusion of the judicial review. The new contracts were originally due to begin on 15 October, but were extended following the Law Society’s successful judicial review of the family tender exercise.

The claimants were supported by other firms, including London firms Bindmans (who also act as instructing solicitors), Duncan Lewis, Steel & Shamash, and Mansfield firm MH Legal.

They had garnered financial support from the Law Society and also sought a protective costs order to limit their financial liability in the event of losing the case.

Rheian Davies, partner at Ealing firm DH Law, which was a new entrant that successfully applied for a mental health contract, was given permission to intervene in the proceedings.

At the High Court last Friday, Mr Justice Cranston refused the application for injunctive relief, but awarded the claimants a protective costs order set at £100,000. He capped the hourly rate that could be charged by Bindmans, which is acting on a CFA, and said the firm could not claim a success fee in the event of it winning.

It was also agreed that counsel for the claimant would be paid at rates that mirrored counsel for the defendant.

After the hearing Davies said: ‘The proposed injunction would have affected new entrants to the legal aid market like us and would have benefited much larger and wealthier legal aid firms 10 times our size who brought or were behind the claim.

'These big firms should understand that for legal aid to retain its vitality, new generations of legal aid lawyers in small firms like ours must be allowed to come through and, if anything, should be supported. We are just glad that all the uncertainty is over and we can get on with representing our clients under the new contract.’

Bindmans partner Saimo Chahal, who is representing the claimants, said she wants any firms that want to support the action to contact her.

Chahal said: 'The claimants were pleased with the outcome of Friday’s hearing - it has made legal history for two law firms, with eight others standing behind them to be granted a Protective Costs Order in these circumstances. The judge recognised that the law firms taking this challenge were not motivated by their financial interests but were litigating in the public interest to ensure that issues of public importance about the way the tender process had been conducted by the LSC for public law and mental health high-secure work was brought under scrutiny.

'The judge noted that the public law firms, namely Public Interest lawyers, Bindmans, Bhatt Murphy and Pierce Glynn and John Ford, were prominent players advancing the public interest through public law work and that it devalued the work these firms did to describe their actions as primarily commercial. This makes an important advance in the law of protective costs. These firms and the six mental health law firms involved in the challenge are happy that the tendering process in these two areas can be scrutinised by the court, and the concerns of their clients about access to justice for them from skilled and experiences lawyers will be looked at by the court.'

Phil Shiner of Public Interest Lawyers said: ‘The LSC has failed to intimidate us into withdrawing the claim by strenuously resisting a PCO. I welcome the PCO and that this important public interest case can proceed. I am particularly concerned about the public law tendering process which will have the effect of dramatically reducing the quality of work in this important constitutional area. I am particularly concerned that our work for non-UK nationals – as solicitors for Baha Mousa’s father – would have to stop.’

A date for the hearing of the judicial review claims has yet to be set.