As discussed in our earlier article 'Liability For Costs In Crown Court Criminal Defence Cases: The Perils Of Cohabitation And Solicitor's Duties') convicted defendants (and their partners) are facing higher, in some cases ruinous, legal costs. But what about those acquitted? Naturally, they do not have to meet the costs of their prosecution, but what of their own costs?
The Old Law
Previously when a person was not eligible for Legal Aid they had the option of paying privately for their representation, and then if they were acquitted at the end of the case an application could be made for payment out of the government's Central Funds to reimbursement them for these costs. This was known as a Defendant's Costs' Order.
Under section 16 of The Prosecution of Offences Act (POA) 1985, the courts had the power to award a person their legal costs back following an acquittal. This was based on an amount that 'the court considered to be reasonably sufficient to compensate the defendant for any expenses which he has properly incurred in the proceedings'. Reasonable rates were determined by reference to rates charged by comparable firms with similar expertise and in a similar locality. When such costs were applied for following an acquittal, the courts either made a summary assessment of the costs or referred the cases to be taxed by the National Taxing Team.
This scheme had been in place for 25 years and was covered in regulation 7 of The Costs in Criminal Cases (General) Regulations 1986, and was embraced by the courts, lawyers and defendants alike, prior to the changes that were brought in by the Government on 31 October 2009.
The Changes
On 31 October 2009, the Labour Government brought in changes which limited the amount of costs that could be reimbursed to a person who had paid for their legal representation and had been acquitted. Regulation 8 amended regulation 7 of The Costs in Criminal Cases (General) Regulations 1986, and The Costs in Criminal Cases (General) (Amendment) Regulations 2009 came into force.
At this time The Ministry of Justice faced serious budget concerns and as a result set a cap on the payments of costs out of Central Funds under POA 1985. They did this by enabling the then Lord Chancellor, Jack Straw to set rates and scales for costs to be paid to those acquitted of offences who had paid for their representation privately. These rates and scales were set at the current legal aid rates which fell far short of the private rates being charged by lawyers representing those who paid for their costs privately. This effectively meant that many people were forced to bear most of the costs of being prosecuted when they had successfully defended their cases, despite the fact that these costs had been assessed as reasonable and incurred at the market rate.
Unsurprisingly these changes caused much controversy and meant that defendants would have to foot a majority of the bill for their legal costs when they had been acquitted. As a result, over 90% of respondents opposed these proposals.
The Law Society raised several significant concerns following these changes. They outlined that these changes went against the principles of justice in that it would be entirely unfair for a person to have to fund their defence when the allegations had not been proven. In addition to this, the Law Society highlighted that these changes could lead to a rise in the number of people that went to court unrepresented. This in turn would affect the fairness of the trial procedure. In essence, a person would not have equality of arms at trial as they would be unrepresented, and their right to a fair trial would be effected. They also outlined that such changes would not only affect defendants, but would also affect criminal firms who relied on private fees as a major part of their profit.
Despite the arguments against these changes, The Ministry of Justice introduced them and the Government declared that 'those who can afford to pay towards the costs of their defence should do so'.1
The High Court Ruling
At the start of this year The Law Society issued proceedings in relation to the changes that were brought into force on 31 October 2009. The Law Society sought a Judicial Review of the decision made by the previous Lord Chancellor to implement these changes given their grave concerns. The Law Society questioned whether the Lord Chancellor in setting the rates or scales could decide what is 'reasonable' to allow the defendant, even if as a consequence the amount recovered fell far short of the amount that the defendant had actually incurred. There were 5 grounds put forward to the court stating that the scheme was unlawful:
- The scheme failed to give effect to the principles underpinning 16(6) of the POA 1985,
- The New Scheme was irrational and internally inconsistent because it applied only to detailed assessments and not to summary assessments by the courts,
- The New Scheme discriminated between private prosecutors and defendants,
- The effect of the New Scheme interfered with the right of access to the courts under Article 6 of the European Convention, and
- The New Scheme was based on a defective understanding of its likely consequences.
The High Court heard the case on 27 May 2010 and judgement was given on 15 June 2010 by Lord Justice Elias and Mr Justice Keith2. The High Court ruled in favour of The Law Society and ruled that the law does not allow the Lord Chancellor to decide what would amount to 'reasonable' defence costs. It went on to state that The POA 1985 was implemented to provide those acquitted of offences with reasonable compensation and quashed regulation 8 and the scales and rates document3. As such it was ruled that this Scheme was unlawful. The court stated that the decision to cap the amount of costs payable to those acquitted meant 'that a defendant falsely accused by the state will have to pay from his own pocket to establish his innocence' and that it was 'a decisive departure from past principles'. Lord Justice Elias commented further that 'any change in that principle is one of some constitutional moment'4 The Law Society president, Robert Haslett said 'This is a great victory for the society on behalf of innocent people who have been prosecuted by the state'.
The Ministry of Justice had said that they were 'disappointed' and were considering their next steps, however it was announced on 7 July 2010 that they would not be appealing against the High Court's decision.
At present, the law has reverted back to what it once was in respect of Defendant's Costs' Orders. Under Part II of POA 1985, those acquitted of an offence who have privately funded their legal representation may obtain their costs out of Central Funds. In such circumstances, the court ought to make a costs order in accordance with section 16 (6), (7) and (9) of the Act. The court will either agree the amount to be paid, or refer the case to The National Taxing Team for determination. In the latter, any claim for costs must be sent to The National Taxing Team within 3 months of the order being made.
As a result of this ruling, a person who has previously been acquitted of an offence but fell foul of the changes implemented in October 2009 will now have the opportunity to appeal the amount of costs reimbursed to them.
Footnotes
1. This was stated by the Ministry of Justice in their document entitled 'The Award of Costs from Central Funds in Criminal Cases' in response to a Consultation held in June 2009 on page 9.
2. [2010] EWHC 1406 (Admin).
3. Regulation 8 of The Costs in Criminal Cases (General) (Amendment) Regulations 2009 which amended regulation 7 of The Costs in Criminal Cases (General) Regulations 1986. The 2009 Regulations were not themselves quashed entirely, just the rates and scales set out under regulation 8.
4. At paragraph 56.
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