IS v Director of Legal Aid Casework

A protective costs order is discretionary and the Corner House principles are not rigid thresholds. The private-interest requirement must be assessed flexibly, having regard to the nature, extent and weight of the claimant’s interest in the overall context. A personal interest does not automatically prevent an order where the claim raises an important issue of general public interest. The court must assess the evidence in the round, including the risk of discontinuance, delay, financial exposure and the resources available to the parties. An indemnity may be treated as the claimant’s available costs protection rather than as evidence that the funder has a private interest in the proceedings. A reciprocal order may also be made where reasonable.

The claimant, a vulnerable and destitute man, sought exceptional legal funding under the Legal Aid Sentencing and Punishment of Offenders Act 2012 for advice concerning his immigration status. He brought judicial review proceedings challenging the refusal of funding and the operation of the exceptional funding scheme. The Public Law Project and counsel acted under a conditional fee agreement, while the Law Society provided a limited costs indemnity.

A deputy High Court judge refused a protective costs order on the papers. Ouseley J declined reconsideration but granted permission to appeal. The central issue was whether the claimant’s personal interest, the public importance of the issues, the available indemnity and the risk of delay or discontinuance justified a protective costs order.

Appeal allowed. Lord Justice Pitchford delivered the leading judgment. Beatson LJ agreed and added observations on the flexibility of the private-interest requirement. Gloster LJ agreed with both judgments.

1. The principles governing protective costs orders were stated in R(Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192, [2005] 1 WLR 2600, and developed in later decisions. They remain overarching principles, but their application is context-sensitive rather than rigid.
2. The requirement that an applicant have no private interest is flexible. The court must consider the nature and extent of the interest, and its weight or importance in the overall context. A personal interest does not disqualify an applicant where the claim also raises issues of substantial general public importance. The approach in R(Bullmore) v West Hertfordshire Hospitals NHS Trust [2007] EWHC 1305 (Admin) and Wilkinson v Kitzinger [2006] EWHC 835 (Fam) was applicable.
3. The purpose of a protective costs order is not a hardline qualification requiring proof that proceedings will otherwise be discontinued. The evidence must be considered in the round, including the risk that the issues will not be heard or will be substantially delayed, and the resulting damage to the public interest.
4. Financial resources were material. The claimant was destitute, acted through the Official Solicitor, and was supported by a conditional fee agreement and a limited Law Society indemnity. The indemnity was properly treated as the limit of funds available to meet costs, rather than as establishing that the Law Society had a personal interest in the outcome. The defendants’ public funding and the fact that other claimants were legally aided were also relevant.
5. The issues concerning access to justice for vulnerable disabled persons were important and pressing. The balance between the public and private interests favoured a protective costs order. A reciprocal order protecting the defendants was also justified, in the same sum of £55,000, having regard to the anticipated short hearing.

• Court of Appeal (Civil Division): allowed the appeal and made a protective costs order in favour of the claimant, together with a reciprocal order in favour of the defendants, each capped at £55,000.
• High Court, Queen’s Bench Division: a deputy judge refused the protective costs order on the papers. Ouseley J declined reconsideration because the application had been determined by agreement on the papers, but granted permission to appeal.