R (Machi) v Legal Services Commission

A comprehensive statutory code governing the revocation and discharge of full legal aid certificates excludes any residual power to embargo further work pending that decision. The express power to impose an interim embargo on an emergency certificate does not support implying a wider power for full certificates. Lawyers remain responsible for deciding what expenditure is essential while the statutory process operates, subject to their duties to report unreasonable conduct and to withdraw from the case where appropriate. In any event, an eleventh-hour embargo which deprives an assisted litigant of representation without a fair opportunity to address the immediate consequences is procedurally unfair. The appeal was therefore dismissed.

The respondent was assisted under a full legal aid certificate in proceedings arising from a workplace injury. After he rejected a settlement offer on his lawyers’ advice, the Legal Services Commission directed that no further work should be undertaken under the certificate pending consideration of its discharge. The direction took effect immediately before trial, with the result that the respondent attended court without representation and settled.

On judicial review, Ouseley J held that there was no power to impose such an embargo, that its imposition was procedurally unfair in any event, and that the decision was not unlawfully delegated or irrational. The Commission appealed against the adverse findings. The central question was whether the Legal Aid Act 1988 and the Civil Legal Aid (General) Regulations 1989 authorised the direction.

1. Appeal dismissed. The order below stood, subject to substituting a direction that the damages claim be assigned to a Queen’s Bench master for directions. The respondent received the costs of the appeal, and permission to appeal to the House of Lords was refused.
2. By a majority, Sedley LJ and Waller LJ held that the Commission had no power to impose an embargo on further work under a full certificate while discharge or revocation was being considered. Sections 4(1) and 15(4) of the Legal Aid Act 1988 had to be read with the detailed code created by the Regulations. That code expressly governed notice, the opportunity to show cause, discharge and revocation, and expressly provided for an embargo only in the specified emergency-certificate situation under Regulation 75(6). It therefore left no room for an implied residual embargo power.
3. Regulations 67 and 70 placed responsibility on the assisted person’s solicitors, advised where appropriate by counsel, to identify and report unreasonable conduct and to determine what interim expenditure was essential. Regulation 69(3) supplied a route by which solicitors or counsel could withdraw if the client insisted on unreasonable conduct. The statutory scheme was comprehensive, even though it might place difficult professional judgments on solicitors.
4. The court unanimously agreed that, even if such a power existed, it had been exercised unfairly. An immediate embargo on the eve of trial deprived the assisted person of a realistic opportunity to secure representation, seek an adjournment or arrange alternative funding. The common-law requirement of fairness was not displaced by the possible engagement of Article 6 of the Convention.
5. Simon Brown LJ respectfully disagreed on the existence of the power. He considered that the Regulations did not oust the residual statutory discretion, but agreed that the power had been unfairly exercised. The common basis for dismissal was therefore unanimous.

• Court of Appeal: Appeal from the Administrative Court dismissed. The order below was varied as to allocation of the damages claim and appeal costs.
• Administrative Court: Ouseley J held that no power existed to impose the embargo, that the direction was unfair if such a power existed, and rejected the delegation and irrationality challenges.