Public Interest Lawyers Ltd, R (On the Application Of) v Legal Services Commission

Interim relief is determined under the American Cyanamid principles, modified where appropriate by the public interest. The court may decide the application solely by reference to the balance of convenience where that balance is clearly against relief. Public interest includes both enabling public authorities to implement the law and preserving access to justice. A protective costs order may be granted where the Corner House criteria are substantially met. A claimant’s private interest does not automatically prevent such an order, although it may affect the assessment. The order must remain fair and proportionate having regard to available funding and likely costs.

Public Interest Lawyers Ltd sought interim relief preventing the Legal Services Commission from entering into contracts arising from tendering exercises for publicly funded public law and mental health legal services. It also sought a protective costs order in judicial review proceedings challenging the tendering process. The existing contracts were due to expire shortly, and successful tenderers were preparing to commence work. The court considered the applicable test for interim relief, the effect of the Public Contracts Regulations 2006, and whether the claimant’s private financial interest prevented a protective costs order.

1. Interim relief. The applicable approach was the American Cyanamid test, modified by public interest considerations. Relevant public interests included allowing public authorities to implement the law and advancing access to justice. There was no need to decide whether there was a serious issue to be tried because the balance of convenience was firmly against an injunction ([10]–[12]).
2. The Public Contracts Regulations 2006, as amended in 2009 to implement Directive 2007/66/EC, did not alter the approach to the balance of convenience. The court declined to reach final conclusions on the burden created by the Regulations because the balance was decisive ([12]).
3. Granting an injunction would cause serious disruption to successful new tenderers, including firms taking premises, hiring staff and relying on contracts for their business plans. The prejudice to the claimants if relief were refused was real but not decisive. The court could not reliably speculate at the interim stage about the form of any final remedy ([13]–[20]). The application for interim relief was refused.
4. Protective costs order. The governing principles were those stated in R (Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192: general public importance, a public interest in resolution, no determinative private interest, fairness having regard to resources and likely costs, and likely discontinuance if no order were made ([21]).
5. A private financial interest did not automatically bar a protective costs order. It was a factor to be weighed. The litigation concerned access to justice and the lawful allocation of public funds, and the claimant could act as a surrogate for others pursuing public interest litigation. The court relied by analogy on In re appeals by Governing Body of JFS [2009] UKSC 1, [2009] 1 WLR 2353 ([22]–[26]).
6. The court granted a protective costs order because the issues required proper testing and the proceedings would probably otherwise be abandoned. A claimant contribution of £100,000 was required. The substantive hearing was ordered before the end of term, and the costs of the interim hearing were reserved ([27]–[28], [96]–[115]).