Bhatt Murphy (a firm), R (on the application of) v The Independent Assessor

Public authorities ordinarily retain power to change policy. An unequivocal promise or established practice of consultation will generally require consultation before change, subject to overriding duties or public interests. Without such an assurance, a consultation duty arises exceptionally where the authority’s past conduct has created a pressing and focussed expectation of continued benefit for particular persons. The existence of a settled policy does not itself guarantee its continuation. Whether transitional arrangements fairly accommodate existing commitments depends on the circumstances. Relevant considerations may include preserving reimbursement for work already undertaken, allowing departures from the new rates and permitting affected professionals to terminate their retainers on reasonable notice.

Three individuals who claimed to have suffered miscarriages of justice challenged the Secretary of State’s immediate abolition of the discretionary compensation scheme, subject to preserving applications already received. They had instructed solicitors before abolition but had not submitted compensation applications. None qualified under the statutory scheme in section 133 of the Criminal Justice Act 1988.

Six specialist solicitors’ firms separately challenged the Independent Assessor’s decision to assess compensation application costs at Legal Help rates instead of private client rates. Existing retainers had been undertaken in anticipation of reimbursement at private rates. Transitional arrangements preserved the previous basis for certain earlier work and allowed representations for higher reimbursement.

The Divisional Court, comprising May LJ and Gray J, dismissed both judicial review challenges on 26 June 2007. The claimants appealed. The central questions were whether legitimate expectations required consultation before either change or more generous transitional protection.

1. The appeals were dismissed unanimously. The consultation documents provided no enforceable assurance of consultation before these changes. The Cabinet Code prescribed how consultation should generally be conducted when consultation was chosen. It preserved ministerial discretion over whether to consult. The Home Office website explained the consultation papers available there and did not establish a universal consultation practice.

2. An unequivocal assurance, given through a promise or established practice, ordinarily entitled those affected to notice or consultation before a policy change. An overriding legal duty or countervailing public interest could justify departure. Without such an assurance, there was no general duty to consult every beneficiary before changing policy.

   The secondary form of procedural expectation concerned exceptional circumstances. The impact of the authority’s past conduct had to be pressing and focussed. Particular persons needed substantial grounds to expect continued benefit, at least for a reasonable period. The appellants’ circumstances lacked those features. Ex p Schemet did not establish the broad consultation entitlement advanced, and the narrow circumstances exemplified by Ex p Unilever were absent.

3. The solicitors were entitled to terminate their retainers on reasonable notice following the costs change. They were therefore free of unavoidable obligations to continue acting at the reduced reimbursement rates. The transitional arrangements preserved the former basis for qualifying earlier work and permitted representations for higher rates in particular cases. Taken together, these matters made the arrangements sufficient. They could not be characterised as unfair or an abuse of power.

4. The individual applicants sought treatment equivalent to that available to persons whose compensation applications had already been submitted. No assurance, promise or practice supported their proposed extension of the preserved category. The scheme’s existence and an ordinary expectation that it would continue supplied no sufficient basis for requiring the Secretary of State to adopt that more generous policy.

5. The judges differed over the explanation of substantive legitimate expectation. Laws LJ considered that its foundation required a specific undertaking directed at a particular individual or group, beyond ordinary policy continuance. Sedley LJ considered that policies themselves could generate protected reliance. On his approach, the law required fair application of policy and protection against unfair frustration of legitimate reliance when policy changed.

   Sedley LJ applied the reasoning in R v MAFF, ex parte Hamble Fisheries and rejected the description of that decision as heretical in Ex parte Hargreaves. He regarded the arrangements here as satisfying the solicitors’ substantive expectations. The Master of the Rolls agreed with dismissal for the reasons given by both judges, but expressly reserved his view on their difference of approach.

• Court of Appeal (Civil Division): In [2008] EWCA Civ 755 , dismissed all appeals unanimously. The Master of the Rolls reserved his view on the differing approaches of Laws and Sedley LJJ to substantive legitimate expectation.
• High Court, Queen’s Bench Division, Divisional Court: May LJ and Gray J dismissed the judicial review applications on 26 June 2007. The solicitors received permission to appeal from that court. Laws LJ granted the individual applicants permission to appeal on 16 October 2007.
• High Court, Administrative Court: Calvert-Smith J granted permission to seek judicial review of the abolition of the discretionary compensation scheme and the change in recoverable legal costs.