R (on the application of E) v Governing Body of JFS and the Admissions Appeal Panel of JFS and others

Where the Legal Services Commission funds a litigant who succeeds, its decision ordinarily provides something close to an assurance of continued support for an appeal brought by the unsuccessful party, while the litigant remains financially eligible. Compelling reasons are required to withdraw funding at that stage, particularly where withdrawal would create substantial costs exposure, the litigant retains a significant interest, and proper determination of issues of public importance requires continued representation.

A protective costs order should not be used merely to remove the Commission’s statutory exposure to an appellate costs order. A court should also be very slow to order each side to bear its own costs in a high-cost, publicly funded case, because that may undermine adequate remuneration and the future availability of legal representation.

E, a publicly funded respondent, had succeeded in the Court of Appeal on his challenge to a school’s admission criteria: [2009] EWCA Civ 626; [2009] PTSR 1442. The school and its governing body obtained permission to appeal on the substantive discrimination issues, while the United Synagogue obtained permission to appeal against a costs order.

The Legal Services Commission indicated that it would not fund E’s opposition to the appeal unless he obtained protection against adverse costs. E therefore applied under rule 30 of the Supreme Court Rules 2009 for an order preventing the appellants from recovering costs from him or the Commission, whatever the appeal’s outcome.

Following concessions, the central question was whether E should receive protection against the school’s costs in the Supreme Court. This required the Court to consider whether the Commission’s refusal to continue funding without such an order was compatible with the statutory funding scheme and lawful on conventional reasonableness grounds.

1. Protective costs order refused. The generic protective-costs principles identified in R (Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192 did not provide a complete answer. The real issue was whether the Legal Services Commission could lawfully condition continued funding on an order protecting it from the ordinary costs consequences of the statutory scheme.

2. The order sought was inappropriate. Regulation 5(3)(d) of the Community Legal Service (Cost Protection) Regulations 2000 permits an appellate court, where just and equitable, to order payment from public funds to a successful non-funded party. The Commission was seeking to eliminate that statutory risk. The circumstances differed materially from Weaver v London Quadrant Housing Trust [2009] EWCA Civ 235: E faced substantial future costs exposure, retained personal and private-law interests, and the discrimination issues had wide public importance.

3. Continued funding required. When the Commission funds a litigant who succeeds, that decision ordinarily carries something close to an assurance that it will continue supporting the litigant against an appeal by the unsuccessful party, while financial eligibility continues. The assurance is especially strong where withdrawal would create a substantial future costs risk, the litigant retains a significant interest in maintaining the result, and the appeal raises issues of public importance which cannot be properly argued without continued funding. Each circumstance existed here.

4. Compelling reasons were therefore required to withdraw funding. None had been shown. The refusal failed to account adequately for the late procedural stage, access to justice, E’s legitimate expectation arising from earlier funding, his continuing interests and the public importance of effective representation. It was so unreasonable as to be unlawful. The Court declared that the only reasonable decision open to the Commission was to continue funding without a protective costs order.

5. No own-costs order. Although E did not seek an order that each side bear its own costs, the Court stated that it would have refused one. A court should be very slow to make such an order in a high-cost case involving publicly funded parties. Preventing successful publicly funded lawyers from recovering inter partes remuneration could make legal-aid practices unsustainable and weaken the public-funding system.

6. The Commission was ordered to pay the costs of the application incurred by E, JFS and the United Synagogue. Publication capable of identifying the child was prohibited.

1. United Kingdom Supreme Court: Refused E’s application for a protective costs order, but declared that continued public funding without such an order was the only reasonable decision open to the Legal Services Commission: [2009] UKSC 1.

2. Court of Appeal: Allowed E’s appeal, held the school’s oversubscription criteria unlawful as direct or alternatively indirect racial discrimination, quashed the admission decisions and ordered reconsideration: [2009] EWCA Civ 626; [2009] PTSR 1442. It also made costs orders in E’s favour.

3. High Court, Administrative Court: Munby J found a breach of section 71 of the Race Relations Act 1976, but otherwise rejected E’s claims: [2008] EWHC 1535/1536 (Admin). The section 71 finding was not appealed.