“Under Regulation 47 (CLS)Financial Regulations 2000 discretion arises but this is exercised rarely and only in exceptional circumstances. Typically the Agency would select a test case from a number of identical cases and run that case in the interests of public money. This would usually be agreed at the start of the case so as to not penalise the client taking the case potentially for the benefit of others. Paragraph 5.6 of the Funding Code Manual explains the Agency’s position in detail.” (the “Refusal”). In a subsequent letter dated17 December 2014 , which was in response to Mr Faulkner’s letter before claim, the Legal Aid Agency stated that it did not accept that the Decision was susceptible to judicial review in the way which had been suggested. The Legal Aid Agency went on to state that the discretion to waive the statutory charge in cases of wider public interest contained in regulation 47 of theCommunity Legal Service (Financial) Regulations 2000 (as amended) (the “2000 Regulations”) arises where two conditions are met. The conditions and their effect were described as follows: “The first is that the case must have been funded in the belief that it has significant wider public interest; the second is that our client chose to fund the case of the particular claimant or claimants on the ground that it was cost effective to do so but not to fund the case of other claimants. These are questions of fact and as the guidance (which you quote) states these conditions must be satisfied at the start of the case, (although the formal discretion is only exercised at the conclusion of the case when damages have been recovered). On the facts as you have presented them, your client does not satisfy these conditions.”
“(7) Except so far as regulations otherwise provide, where services have been funded by the Commission for an individual as part of the Community Legal Service— (a) sums expended by the Commission in funding the services (except to the extent that they are recovered under section 11), and (b) other sums payable by the individual by virtue of regulations under this section, shall constitute a first charge on any property recovered or preserved by him (whether for himself or any other person) in any proceedings or in any compromise or settlement of any dispute in connection with which the services were provided.”
“where any money or property is recovered for a client in a relevant dispute or proceedings, the amount of the statutory charge shall be the aggregate of the sums referred to in section 10(7)(a) and (b) of the [1999] Act.”
"1 The statutory charge is designed to: (a) put legally aided individuals as far as possible in the same position as successful non‑legally aided individuals (who are responsible at the end of their cases to pay their own legal costs if their opponent in the litigation does not, or is unable, to pay them). The statutory charge converts legal aid from a grant into a loan. (See Davies v Eli Lilly & Co[1987] 3 All ER 94 at 97 to 98.) (b) ensure that legally aided individuals contribute towards the cost of funding their cases so far as they are able; and (c) deter legally aided individuals from running up costs unreasonably by giving them a financial interest in how much money is being spent. 2 For about as long as there has been a solicitors' profession, solicitors have had a charge for any unpaid fees over any property they recover or preserve for their client. This is known as the 'solicitor's charge'.Section 73 of the Solicitors Act 1974 provides: 'Any court where a solicitor has been employed to prosecute or defend any suit, matter or proceeding may ..... declare the solicitor entitled to a charge on any property recovered or preserved through his instrumentality for his taxed costs ..... ' 3 The law that creates the statutory charge is based on the solicitor's charge. The principle behind the solicitor's charge is that it is fair for solicitors to be able to take their costs out of any property their clients recover or preserve because of the services provided."
“47 (2) Paragraph (3) applies where: (a) the Commission funds Legal Representation in proceedings which it considers have a significant wider public interest; and (b) the Commission considers it cost-effective to fund those services for a specified claimant or claimants, but not for other claimants or potential claimants who might benefit from the litigation. (3) Where this paragraph applies, the Commission may, if it considers it equitable to do so, waive some or all of the amount of the statutory charge.” “Wider public interest” for the purposes of regulation 47(2)(a) is defined as meaning: “. . . the potential of proceedings to produce real benefits for individuals other than the client (other than any general benefits which normally flow from proceedings of the type in question).”
“Waiver of the statutory charge in cases of significant wider public interest (1) The Lord Chancellor may, where the Lord Chancellor considers it equitable to do so, waive all or part of the amount of the statutory charge, if the following conditions are satisfied – (a) The Director was satisfied, in determining that a legally aided party qualified for legal representation, that the proceedings had a significant wider public interest; and (b) The Director in making the determination took into account that there were other claimants or potential claimants who might benefit from the proceedings.” “Significant wider public interest” is defined in regulation 9(2) as having the same meaning as in theCivil Legal Aid (Merits Criteria) Regulations 2013 . At regulation 6 of those regulations, it is stated that “a case is of significant wider public interest if the Director is satisfied that the case is an appropriate case to realise— (a) real benefits to the public at large, other than those which normally flow from cases of the type in question; and (b) benefits for an identifiable class of individuals, other than the individual to whom civil legal services may be provided or members of that individual’s family.” (a) The Director was satisfied, in determining that a legally aided party qualified for legal representation, that the proceedings had a significant wider public interest; and (b) The Director in making the determination took into account that there were other claimants or potential claimants who might benefit from the proceedings.” “a case is of significant wider public interest if the Director is satisfied that the case is an appropriate case to realise— (a) real benefits to the public at large, other than those which normally flow from cases of the type in question; and (b) benefits for an identifiable class of individuals, other than the individual to whom civil legal services may be provided or members of that individual’s family.”
“27. . . . Looking at the language of the regulation, it seems to me to be abundantly clear that the draftsman intended, even if he did not express himself at all well, that the decision as to whether, first, the proceedings had a wider significant public interest and, second, and more importantly, whether other cases should be funded in a different way has to have been made either at the beginning or during the course of the case. There is simply no other logical linguistic interpretation to be derived from this regulation. To my mind that is put beyond doubt by its replacement, Regulation 9 of theCivil Legal Aid (Statutory Charge) Regulations 2013 (SI 2013/503). In that, the language makes it absolutely clear beyond any doubt that the waiver decision is made at the end of the case but that the conditions precedent occur either at the beginning or during the course of the case. 28. To my mind the difference between the two regulations does not demonstrate, as Mr Southey submits with a certain amount of force it has to be said, that the later regulation was changing the earlier regulation. To my mind the later regulation was clarifying the ambiguous meaning of the earlier regulation.”
“5.6 Financial Conditions . . . 2.The Commission’s aim is to ensure that issues with a significant wider public interest are brought to the court for determination in the most cost effective way. Often this will mean funding an individual test case to resolve the issue, even if the damages alone in that test case would not make it cost effective in itself. If the case is complex and not all issues are resolved in the client’s favour, it is quite likely that a public interest test case would have significant irrecoverable costs. In the normal event these would not come out of the client’s damages. The powers under regulations 38(9) and 47 above exist to ensure that such a client is not unduly penalised in relation to the client’s own contribution or damages through having been chosen as the test case. 3. Even though it will be made clear from the outset that a case is being funded as a test case, the formal discretion as to the statutory charge will only be exercised at the conclusion of the case when damages have been recovered. The existence of the limited power to waive the charge under the above regulation does not diminish the responsibility of solicitors to seek to maximise the recovery of costs from the other side in a successful public interest case. The Commission would be unlikely to waive any amount of the charge if a case was settled without recovery of costs simply in the expectation that the waiver would apply. 4. Where contributions or the statutory charge are waived under the above regulation, it will not necessarily be waived in full. The aim of the regulation is to put the test case client in the same position as an individual claimant, who might still have some contribution or irrecoverable costs.”
". . . the Court finds it reasonable that in this type of proceedings where the State, on account of the poor organisation of its judicial system, forces litigants – to some extent – to have recourse to a compensatory remedy, the rules regarding legal costs may be different and thus avoid placing an excessive burden on litigants where their action is justified. It might appear paradoxical that, by imposing various taxes – payable prior to the lodging of an application or after the decision – the State takes away with one hand what it has awarded with the other to repair a breach of the Convention. Nor should the costs be excessive and constitute an unreasonable restriction on the right to lodge such an application and thus an infringement of the right of access to a tribunal."