IMPORTANT EDIT 29th June 2018
IMPORTANT EDIT RE THE STATUTORY CHARGE AND DAMAGES 29th June 2018
I am very pleased that this post is now redundant!
Northamptonshire County Council & Anor v The Lord Chancellor(via the Legal Aid Agency) , considers important new Guidance from the Legal Aid Agency. It confirms that it will no longer apply the statutory charge from care proceedings to Human Rights Act 1998 damages.
See this article by Will Tyler QC and Ben Mansfield in Family Law Week for further discussion.
Provided this guidance is followed then the LAA will not seek to recoup damages. Parties must:
- attempt resolution of the claim without issuing HRA proceedings. This may include seeking agreement from the Local Authority to pay the claimant’s reasonable costs of a Part 8 CPR infant approval hearing in the event settlement is reached, to be heard by the care proceedings judge, see H (A Minor).
- If its necessary to go to court practitioners must:
- seek a separate legal aid certificate for the HRA damages claim; and
- issue separate HRA claim forms pursuant to s.7(1)(a), HRA, in accordance with Part 8 of the Civil Procedure Rules, to be listed and determined alongside the care proceedings.
- seek early confirmation from the LAA that the care proceedings statutory charge will not apply to the prospective HRA award.
- confirm that they will not and have not claimed HRA costs under the legal aid certificate covering the care proceedings.
For those who want to enjoy a trip down memory lane to less happier times, you can see what used to be the impact of the statutory charge.
NOTE: this post was first published on 21st February 2017 and discussed only the Kirklees case. However, soon after I was alerted to yet another published case in this field – H (A Minor) v Northamptonshire County Council  EWHC 282 – so this post has been enlarged to consider the impact of both decisions.
Too long; didn’t read
There have been some interesting recent cases about making claims under the Human Rights Act (HRA). You can find our discussion about the Hackney case and the comments about the correct amount of damages here. For a more detailed discussion of the provisions of the HRA itself and the European approach to quantum of damages, see this post from the Child Protection Resource.
What Kirklees and Northamptonshire tell us – two very different outcomes, their judgments only a day apart – is that the current state of affairs regarding HRA claims, damages and the statutory charge is simply an embarrassment.
Few could surely disagree that a legal regime which is prepared to recognise serious breaches of human rights and award compensation but AT THE SAME TIME will claw back all damages paid by way of the statutory charge, is simply not fit for purpose.
And as with any such regime, more and more creative attempts will be made by lawyers and the courts to circumvent it, leading to more and more complicated and contradictory decisions and an ever-growing pile of case law that even lawyers, let alone litigants in person, will fear to approach. I note the commentary from Suesspciousminds, with which I entirely agree:
Keehan J is playing a Lord Denning type role here, in manipulating and coaxing the law into shapes like a Venetian glassblower to get to the morally right outcome. I think myself that Cobb J is right in law, but who knows until the Court of Appeal tell us?
What I think I can conclude so far is this
- damages for HRA claims are not meant as punishment or deterrence; they are unlikely to be large sums of money;
- there is a clear need to think long and hard at the outset of a case about what damages you are likely to get and the impact on such damages of the statutory charge if you are publicly funded. Serious consideration at an early stage should be given to attempts to settle by all parties;
- Keehan J has offered a route to attempt to reduce the impact of the statutory charge by making a freestanding HRA – but this is not going to apply in every case;
- The Government needs to give urgent consideration to amending the current regime of the statutory charge and to consider HRA claims as exempt from this;
What is the statutory charge?
Before I begin to look at the decisions in Kirklees and Northamptonshire, it will help to set out brief discussion of what exactly the ‘statutory charge’ is and what it does. In essence, the ‘statutory charge’ converts legal aid from a grant into a loan. (See Davies v. Eli Lilly & Co  3 All ER 94 at 97 to 98).The purpose of the statutory charge, is set out in the Statutory Charge Manual as follows:
- to 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).
- to ensure that legally aided individuals contribute towards the cost of funding their cases so far as they are able; and
- to deter legally aided individuals from running up costs unreasonably by giving them a financial interest in how much money is being spent.
It is clear that the statutory charge can have a very serious impact on any claim for damages under the HRA 1998. We see this in the judgement of Cobb J in Kirklees.
The impact of the Kirklees case
The recent decision of Cobb J in the recent case involving Kirklees Council CZ (Human Rights Claim: Costs)  EWFC 11 (16 February 2017) was a clear example of an unlawful breach of Articles 8 and 6 of the ECHR – the parents’ child was removed from their care as a new born baby and lived with grandparents for a few weeks. But this was done apparently without telling the parents what the plan was and repeatedly misleading the court about whether or not the parents did know and did agree.
Luckily the damage was underdone fairly swiftly, but I don’t want to attempt to gloss over or downplay what a frightening experience that must have been for the parents. To have the first few weeks of your baby’s life spent in this way must have been profoundly horrible. So Cobb J quite rightly recognised that this was a serious breach of the human rights of parents and child – now happily reunited with the parents and on all accounts, doing well. The case was subject to the expected amount of misreporting – the baby was taken because the father had ‘views’ about formula milk for e.g. That – if you read the judgment – appears to be a pretty unfair characterisation of the LA’s case. The Transparency Project have sought to challenge a number of these reports and the case has provoked quite a lot of discussion online.
However, what is interesting to me about this case, is not so much the tabloid distortions of the judgment but that another alarm bell appears to be rung about damages in HRA cases. The first clear warning note was sounded in the Hackney case, cited above. And here, we have a case where Cobb J realises that the amount of damages he will award – £3,750 to each parent and child – will inevitably be swallowed up by the statutory charge.
The costs in the case before Cobb are set out at para 46 of the judgment. They are horrifying. The ‘grand total’ is around £120K. This is all public money. The parents argued hard for the LA to pay their costs, realising the impact of the statutory charge. However, Cobb J refused; the LA it seems had made sensible and timely efforts to settle this case, realising that their conduct could not be defended.
His reasons are set out very clearly at para 58:
I reject the Claimants’ arguments on this first basis for the following reasons:
i) I do not accept that the very wide discretion afforded to me under section 8(1) has to be condensed to one option only (i.e. to make a substantive award of costs) simply in order to achieve a ‘just’ outcome under section 8(3);
ii) If it had been the intention of Parliament that damages awarded under the HRA 1998 would be exempt from the statutory charge, it would have provided for this in the revised Statutory Charge Regulations (2013); it did not;
iii) Most awards of damages would be likely to be reduced to some extent by the incidence of assessment/taxation of the litigant’s own bill. While this may not apply so harshly to publicly funded litigants, it seems to me that the Claimants could not be insulated against the eventuality that the shortfall in any assessment would in itself lead to the obliteration of a modest award of damages;
iv) The award of non-pecuniary damages under section 8(3) is intended to reflect the Court’s disapproval of infringement of the claimants’ rights, in providing “just satisfaction” to the claimant; it is not intended to be, of itself, a costs award. I would regard it as unprincipled to increase the award of damages by a significant sum (which on the instant facts could be approximately seven-fold) to reflect the costs of the proceedings. Parliament has devised a legitimate mechanism for the recovery of the costs incurred from those who benefit from state-funded support to pursue their litigation, and however unfairly it may operate in an individual case, it must be respected;
v) In any evaluation of costs whether under the CPR 1998 or the FPR 2010, I am obliged to have regard to the parties’ litigation conduct, and whether costs are reasonably or not reasonably incurred. The Claimants’ approach would require me to ignore or forgive any reckless, wasteful or profligate manufacture of costs in order to ensure that the Claimants receive their award; this cannot be right. In this case, as will be apparent from my comments below, the Claimants did not conscientiously attempt to settle their claims, whereas I am satisfied that the Local Authority did make genuine efforts to do so, and this influenced my approach to the second argument below;
vi) The Practice Direction of the European Court of Human Rights (see  above) specifically refers to costs awards being upheld “only in so far as they are referable to the violations it has found”. If I am to cast an eye across to Strasbourg for guidance under section 8(4), then this is the answer I receive; this guidance would steer me towards an award of costs referable to the period 13.11.15-7.12.15 but not otherwise;
The impact of the Northamptonshire case
The day after the judgment in Kirklees, came the decision of Keehan J in H (A Minor) v Northamptonshire County Council & Anor  EWHC 282 (Fam) (17 February 2017). Keehan J made it clear that he understood and deprecated the impact of the statutory charge in such cases, commenting at paras 120 and 121 of his judgment.
The issue I raise, in the context of HRA claims brought by children, and by parents, during the currency of pending care proceedings, is whether it is just, equitable or reasonable that damages awarded to a child, or to a parent, as a result of breaches of his/her Convention Rights by one organ of the State should be recouped by another organ of the State in respect of public law proceedings which would otherwise not be recoverable. Public funding in such cases is non means tested and non merits based. Furthermore, save in exceptional circumstances, the local authority issuing the care proceedings is not liable to pay the costs of any other party: Re T  UKSC 36.
I very much doubt that such a recoupment is just, equitable or reasonable. In the vast majority of cases the effect of the recoupment of the child’s or parent’s costs of the care proceedings will be to wipe out the entirety of the HRA damages awarded. In this event, the child or the parent will not receive a penny.
Keehan J therefore took advantage of the distinction between HRA claims made during care proceedings (where the costs of the entire care proceedings will be relevant) and HRA claims made separately from the care proceedings (where costs clawed back from damages awarded will be restricted to just the costs of that application).
It will be interesting to see how this develops, given the potential for some quite artificial distinctions between the two types of HRA cases.
The facts behind the decision in the Northamptonshire case
This case involved an 8 year old boy who was placed in long term foster care with contact to his father, the Judge expressing the hope that rehabilitation to the father’s care might be a future option. The LA had caused significant breach to H’s human rights; including failure to issue care proceedings until 2016, despite clear and obvious concerns about the care H was receiving from about 2012, and had wrongly restricted H’s contact with his father. A human rights (HRA) claim was issued on behalf of the child ‘H’ (a similar claim by the father having been settled without the need to issue proceedings) and the Legal Aid Agency (the LAA) granted a separate public funding certificate to H’s solicitors.
H’s HRA claim was then settled without the need for court argument. The LAA decided it would not seek to recoup any of H’s costs from the settlement figure. This lead to the LA trying to seek costs from the Lord Chancellor, supported by H.
The Judge was also urged to give general guidance on the approach to be taken by practitioners and the LAA in respect of HRA claims made during the currency of care proceedings.
During the care proceedings, the Judge was aware that applications were being made to the LAA for funding to make applications pursuant to the HRA and the Judge expressed that such applications were to be made separately but determined alongside the care proceedings. Thus on 22 September 2016, a claim was issued on behalf of H against the LA pursuant to s.7(1)(a) of the Human Rights Act 1998 – NOT under s.7(1)(b), which permits claims within existing proceedings. H’s solicitors sought clarification from the LAA as to the impact of the statutory charge upon such a ‘free standing’ HRA application.
The LAA replied:
I would advise you that subject to the extent of the connection between the Human Rights action and the initial Care proceedings any Damages recovered as a consequence of the Human Rights proceedings will be subject to the Statutory Charge and it is possible that the liability will extend to the costs arising from the Care proceeding. The consideration of the connection is made once the settlement is reached, and would depend on the facts of the case. I note that counsel refers to the Human Rights proceedings being freestanding however I am unable to make a final decision as regards the statutory charge position without the full facts being available to me. If the client obtained a finding in the care proceedings that led to the award of damages then the costs of the care proceedings would in principle form part of the charge.
The LA then made an open offer to settle H’s HRA claim for £18,000. The court decided that it was not possible to agree the amount of damages unless first knowing what the LAA were going to do about the statutory charge; if the costs of the care proceedings were included, the statutory charge would consume the entirely of the agreed damages. The LAA were thus invited to intervene in the proceedings. They initially stated that they would apply the statutory charge. However, their eventual position ‘at the 11th hour’ was finally stated that they would NOT apply the costs of the care proceedings to the statutory charge.
… relates to a claim for damages as a result of the delay in bringing the care proceedings, rather than relating to issues within the care proceedings. The HRA damages claim is a separate set of proceedings being funding under a separate legal aid certificate. Only the costs spent under the HRA certificate could attach as a charge to damages recovered in those proceedings.
Because the LAA had taken so long to confirm its position, the LA agreed to pay H’s costs only up until the date the LAA were invited to intervene. All costs incurred thereafter should be met by the Lord Chancellor’s Department. It was argued that the provisions of s.51 SCA and CPR r.46.2 clearly provide the court with the power to make a costs order against a third party and the behaviour of the LAA justified the making of such an order. Keenhan J agreed he had the power to make such an order and he would do so. He confirmed that £21,500 was the appropriate sum of damages to be awarded to H.
General guidance offered by Keehan J
He discussed the judgment Munby J (as he then was) in Re L (Care Proceedings: Human Rights Claims)  EWHC 665 (Fam),  2 FLR 160 which was expressly approved by and received the “whole-hearted endorsement” of the Court of Appeal in Re V (Care Proceedings: Human Rights Claims)  1 FLR 944, per Wall LJ at para 98. Re L drew an important distinction between those cases where HRA issues arise when care proceedings are on-going and where care proceedings have come to an end. In the latter case, the appropriate remedy may well be a free-standing application under section 7(1)(a) of the 1998 Act. However, if care proceedings are on-going, the President was very clear that HRA claims should,be dealt with within the context of the care proceedings and by the court which is dealing with the care proceedings.
Keehan J was clear that the present case was an example of when it was permissible to issue a separate application for a HRA and that it was likely to be a tactical necessity if damages were sought, saying at para 115
I respectfully agree with Munby J’s general proposition that a court hearing public law proceedings should deal with any associated HRA claim brought by one of the parties to the care proceedings. His concern was to prevent the proliferation of satellite litigation in respect of HRA claims. The judgment should not be read, and was plainly not intended to be read, as requiring a party seeking HRA damages to issue his or her claim within the existing public law care proceedings. On this basis the decision in Re L, and the decision in Re V, may be distinguished from proceedings in which a HRA claim is pursued and damages are sought. Therefore, where the remedy sought in the HRA claim is not limited to injunctive or declaratory relief but includes a claim for damages, it is almost inevitable that those representing the Claimant will be well advised to issue separate proceedings and to seek the issue of a separate public funding certificate because of the potential applicability of the statutory charge in respect of any HRA damages awarded.
We are in a mess. What we need is an authoritative Court of Appeal judgment. It is not fair on parents, children, lawyers OR judges to be launching these type of claims with so much complex ducking and diving required to secure justice and the proper operation of a statute. Either the law around the statutory charge is amended or the Human Rights Act is simply abolished. I will make no further comment on which scenario, in this Brave New World, is more likely.