London Borough of Hillingdon & Ors, R (on the application of) v The Lord Chancellor & Ors

The setting of full-cost court fees for public law family proceedings is not irrational merely because it may influence case preparation or resource allocation. Where children’s interests are potentially engaged, the court must apply anxious scrutiny and ask whether the fee and funding arrangements create a real, rather than fanciful, risk that a local authority will fail to issue proceedings objectively required. A statutory consultation scheme specifying consultees ordinarily excludes an additional common-law duty to consult a wider group, absent a clear promise or established practice. Longstanding subsidised fees do not alone create a procedural legitimate expectation. Funding through an unring-fenced general grant may still be sufficient. An assurance about aggregate funding is not a clear assurance that every authority will be fully reimbursed. No separate consultation duty arose concerning the transitional fee provisions.

Four local authorities sought judicial review of the Lord Chancellor’s decision, implemented by the Family Proceedings Fees Order 2008 and the Magistrates’ Courts Fees Order 2008, to introduce full-cost fees for public law child care and placement order applications. Care application fees rose from £150 to £4,825, and placement order fees from £100 to £400. The Law Society and NSPCC intervened.

The claimants alleged failure to consult, irrationality, failure to consider an alleged funding shortfall, mistake of fact, breach of substantive legitimate expectation and unlawful retrospectivity. The central issue was whether the fee increases and Formula Grant arrangements created a real risk that local authorities would delay or fail to protect children by issuing necessary proceedings.

The Divisional Court, with Dyson LJ giving the leading judgment and Bennett J and Pitchford J agreeing, dismissed the application.

1. Consultation. Section 92 of the Courts Act 2003 specified the persons and body to be consulted before fee orders were made. That statutory scheme strongly militated against an additional common-law duty to consult local authorities, absent a clear promise or established practice. Parliament had chosen the extent of consultation, and the court should not add to it.
2. Longstanding enjoyment of subsidised fees did not itself create a procedural legitimate expectation. The withdrawal of the subsidy was a national policy decision. It did not amount to an abuse of power or such unfairness as to require consultation. R v Secretary of State for the Environment, ex p Brent LBC [1982] 1 QB 593 was distinguishable because an accrued right had been removed without compensating funding and there had been no statutory consultation duty.
3. Irrationality. Because vulnerable children’s interests might be affected, the court applied anxious scrutiny. The relevant question was whether, in the real world, the increased fees and funding arrangements created a real, rather than fanciful, risk that a local authority would fail to issue proceedings objectively required. The court considered the adequacy of the £40 million aggregate funding, the relatively small possible individual shortfalls, the much greater existing costs of care proceedings, the evidence that authorities would not act contrary to their statutory duties for financial reasons, and the ability of authorities to ring-fence the additional funding themselves.
4. The Government’s objectives of efficient resource allocation, visibility of true costs and discouraging premature or poorly prepared cases were not logically incompatible. Fiscal transparency was an independent rational justification. The orders therefore were not irrational.
5. The assurances relied upon for substantive legitimate expectation were, at best, ambiguous. They did not clearly promise that every individual authority would receive funding matching its own fee liability. The realistic interpretation was that authorities as a whole would be funded through the Formula Grant.
6. The transitional provisions, including article 6 of the Family Proceedings Fees Order 2008, applied increased fees to later hearings in proceedings issued before 1 May 2008. No separate duty to consult arose on that narrow issue where there was no duty to consult on the fundamental fee increase.

All grounds of challenge failed. The application was dismissed.