West Law Report

Minister can withdraw compensation scheme

Posted in Times Law Report by mrkooenglish on July 22, 2008

From The TimesJuly 21, 2008

Minister can withdraw compensation scheme

Court of Appeal

Published July 21, 2008

Regina (Bhatt Murphy (a Firm) and Others v Independent Assessor Regina (Niazi and Others) v Secretary of State for the Home Department

Before Sir Anthony Clarke, Master of the Rolls, Lord Justice Laws and Lord Justice Sedley

Judgment July 9, 2008

The mere existence of an ex gratia scheme for compensation to the victims of miscarriages of justice was not by itself sufficient to create a legitimate expectation that the scheme would be continued. In consequence, the minister was entitled to abolish it without consultation or notice.

The Court of Appeal so held, dismissing two appeals against the dismissal by the Queen’s Bench Divisional Court ([2007] EWHC 1495 (Admin)) of claims for judicial review by:

(i) Bhatt Murphy, Bindman & Partners, Bird Solicitors, Fisher Meredith, Hickman & Rose and Hodge Jones Allen, all firms of solicitors, against the decision of the Independent Assessor to reduce the level of legal costs payable from April 19, 2006 under the discretionary and statutory compensation schemes for victims of miscarriages of justice and

(ii) Noorrullah Niazi, Hamidreza Taghibeglou and Huseyin Cakir who had instructed solicitors to make claims under the discretionary scheme but had not submitted applications when on April 19, 2006 the Secretary of State for the Home Department withdrew the scheme.

Mr Rabinder Singh, QC and Ms Phillippa Kaufmann for the solicitors; Mr Rabinder Singh, QC and Mr Stephen Cragg for the individual claimants; Mr Jonathan Swift for the Home Secretary and the Independent Assessor.

LORD JUSTICE LAWS said that the individuals, who claimed to have suffered miscarriages of justice, were not eligible for compensation under the statutory compensation scheme. Their prospective claims were under the discretionary scheme.

The solicitors were six firms possessing specialist professional skill in that field, having over time represented many persons seeking compensation for actual or alleged miscarriages of justice, They both sought judicial review: the individuals of the decision to withdraw the discretionary scheme, the solicitors of the decision to substitute a less generous basis of assessment for legal costs. Both decisions were announced by the secretary of state in a written ministerial statement on April 19, 2006.

The arguments were all based on the doctrine of legitimate expectation; a well known public law concept but its reach in practice was still being explored.

The power of public authorities to change policy was constrained by the legal duty to be fair, and other constraints which the law imposed. A change of policy which would otherwise be legally unexceptionable could be held unfair as a result of prior action, or inaction by the authority.

If it had clearly promised to consult those affected or potentially affected, then ordinarily it had to consult. That was the paradigm case of procedural expectation.

If it had distinctly promised to maintain existing policy for a specific person or group who would be substantially affected, then generally it had to keep its promise, That was the paradigm case of substantive expectation.

If, without making any promise, it had established a policy which distinctly and substantially affected a particular person or group who in the circumstances was reasonably entitled to rely on its continuation and did so, then ordinarily it was obliged to consult before effecting any change. That was the secondary case of procedural expectation.

In any of those instances to do otherwise would be to act so unfairly as to perpetrate an abuse of power.

The question on the appeal was whether any potentially enforceable legitimate expectation had arisen. Neither the Cabinet Office Code of Practice on Consultation nor the Home Office website committed the Home Office to a universal practice of consultation. A decision in a particular case whether to consult was a policy decision.

On the basis that there was no promise to consult before the abolition of the discretionary scheme, the secondary case of procedural expectation denoted an exceptional case, where the impact of the authority’s past conduct on potentially affected persons was pressing and focused. In this case there was nothing of the kind.

In respect of the solicitors’ claims for larger transitional provisions, in the light of the costs changes announced on April 19, 2006, they would have been entitled to terminate their retainers. The arrangements actually made could not possibly be characterised as unfair, far less as an abuse of power.

The reach of the policy change was entirely in the hands of the secretary of state. Critically, no evidence was produced on behalf of the solicitors or the claimants of any promise, assurance or practice that the policy would be set differently in any respect.

Before April 19, 2006, there was nothing more than the scheme’s existence; at most a factual expectation that it would continue in effect until rational grounds arose for its cessation. Such an everyday state of affairs was categorically inadequate to generate a legitimate expectation enforceable in the courts.

Lord Justice Sedley delivered a concurring judgment and the Master of the Rolls agreed.

Solicitors: Bindman & Partners; Hodge Jones & Allen and Fisher Meredith; Treasury Solicitor.

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