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Administrative Court holds that regulations limiting recoverable costs to legal aid rates are unlawful

R (On the Application of the Law Society) v The Lord Chancellor [2010] EWHC 1406 (Admin)

The Administrative Court (Elias LJ and Keith J) yesterday held that the new regulations limiting the costs recoverable by successful defendants in criminal cases were unlawful.

Under s16 of the Prosecution of Offences Act 1985 a court may award a successful defendant or appellant his costs out of central funds (a defendant’s costs order). S20 of the 1985 Act provides that the Lord Chancellor may make regulations setting down scales and rates for any costs payable out of central funds pursuant to any court order.

The Lord Chancellor exercised this power for the first time when he implemented the Costs in Criminal Cases (General) (Amendment) Regulations 2009. Those Regulations, which came into force on 31.10.09, provided that the costs to be awarded under a defendant’s costs order should be limited to legal aid rates. Payments under the 2009 Regulations inevitably fell short, sometimes well short, of the costs actually incurred.

The Court found that the new scheme was unlawful. The obligation under s16(6) of the 1985 Act is to provide a sum of money which is reasonably sufficient to compensate the successful defendant. In making the 2009 Regulations the Lord Chancellor had sought to achieve objectives inconsistent with the purpose for which he was entitled to make regulations under s20 of the 1985 Act.

Elias LJ held, at paragraph 56, that:

“The new regulations involve a decisive departure from past principles. They jettison the notion that a defendant ought not to have to pay towards the cost of defending himself against what might in some cases be wholly false accusations, provided he incurs no greater expenditure than is reasonable and proper to secure his defence. Any change in that principle is one of some constitutional moment. It means that a defendant falsely accused by the state will have to pay from his own pocket to establish his innocence. Whatever the merits of that principle, I would be surprised if Parliament had intended that it could properly be achieved by sub-delegated legislation which is not even the subject of Parliamentary scrutiny.”

It is to be assumed that defendant’s costs orders will fall to be assessed under the old scheme unless and until a new scheme is introduced.

Members of our Criminal Regulatory & Environmental Law team are happy to advise on any matters arising out of this judgment.

For the full judgment please click here.

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