Victims of alleged miscarriages of justice and specialist solicitors challenged the Secretary of State's withdrawal of the discretionary compensation scheme and reduction of recoverable legal costs. The Court of Appeal dismissed the appeals, finding no enforceable legitimate expectations arose from the pre-existing policy or costs arrangements.
Background
Since 1905, the Home Secretary made ex gratia payments to victims of miscarriages of justice. From 1985, a statutory scheme under s.133 of the Criminal Justice Act 1988 operated alongside a discretionary scheme. On 19 April 2006, the Secretary of State announced the withdrawal of the discretionary scheme (save for applications already received) and the Independent Assessor decided that recoverable legal costs would henceforth be assessed at Legal Help rates rather than private client rates — a reduction of approximately three to five times.
Two sets of appellants challenged these decisions. The ‘applicants’ were three individuals whose convictions had been quashed or charges dropped, who had instructed solicitors but not yet submitted compensation applications before 19 April 2006. None was eligible under the statutory scheme. The ‘solicitors’ were six specialist firms engaged on retainers at private client rates in the expectation that costs would be reimbursed by the Independent Assessor at those rates.
Transitional arrangements provided that the previous costs basis would apply to work done before 19 April 2006 in already-submitted cases, and that representations could be made for higher rates in existing cases where work was undertaken on the assumption the old rate would apply. The Divisional Court dismissed both judicial review applications, and the appellants appealed.
The Issue(s)
The central question was whether either set of appellants possessed enforceable legitimate expectations — procedural or substantive — that were breached by the decisions of 19 April 2006. Specifically:
Procedural legitimate expectation
(i) Whether the Cabinet Office Code of Practice on Consultation or the Home Office website constituted a promise to consult before changing policy (the ‘paradigm case’); and (ii) whether, absent any such promise, the appellants were entitled to consultation before the policy changes were effected (the ‘secondary case’).
Substantive legitimate expectation
(iii) Whether the solicitors were entitled to continued payment at private client rates in all ‘pipeline’ cases; and (iv) whether the applicants were entitled to be treated as if their applications had been submitted before 19 April 2006.
The Court’s Reasoning
Taxonomy of legitimate expectations
Laws LJ undertook a detailed analysis of the doctrine of legitimate expectations, identifying three categories. First, the ‘paradigm case’ of procedural legitimate expectation, arising from an express promise or established practice of consultation. Second, substantive legitimate expectation, requiring a specific undertaking directed at a particular individual or group assuring the policy’s continuance. Third, a ‘secondary case’ of procedural expectation, arising even without a promise of consultation where the impact of past conduct on affected persons is ‘pressing and focussed’.
Laws LJ emphasised the exceptional nature of enforceable legitimate expectations:
Public authorities typically, and central government par excellence, enjoy wide discretions which it is their duty to exercise in the public interest. They have to decide the content and the pace of change. Often they must balance different, indeed opposing, interests across a wide spectrum. Generally they must be the masters of procedure as well as substance; and as such are generally entitled to keep their own counsel.
No promise to consult
The Court held that neither the Cabinet Office Code of Practice nor the Home Office website constituted a promise to consult. As May LJ had held below, the Code prescribed how consultation should be conducted if undertaken, not that consultation was required before every policy change. The website sentence was merely an explanation of the nature of consultation papers available.
Secondary procedural expectation rejected
Laws LJ rejected the argument that beneficiaries of a policy enjoy a legitimate expectation that it will continue until rational grounds for withdrawal are communicated and they are given an opportunity to comment. He held that the secondary case of procedural expectation is exceptional and requires impact that is ‘pressing and focussed’. Citing Sedley LJ in BAPIO:
But what are its implications? The appellants have not been able to propose any limit to the generality of the duty. Their case must hold good for all such measures, of which the state at national and local level introduces certainly hundreds, possibly thousands, every year.
Laws LJ concluded:
There is nothing in the facts of this case to bring it within the narrow and specific compass, best exemplified by Ex p Unilever, which is the proper territory of this class of legitimate expectation.
Substantive expectation rejected
Regarding the solicitors’ claim, Laws LJ noted they could terminate their retainers upon the change. He held that, given the transitional arrangements including the ability to make representations for higher rates, it was
impossible to characterise the arrangements actually made as unfair, far less as an abuse of power.
As to the applicants, Laws LJ held that what was being contended for was essentially a more generous policy, whereas the reach of the policy change was wholly in the Secretary of State’s hands:
Before 19 April 2006, there was nothing more than the scheme’s existence: at most a factual expectation that it would continue in effect until rational grounds for its cessation arose. As I have sought to explain, such an everyday state of affairs is categorically inadequate to generate a legitimate expectation which the courts will enforce.
Sedley LJ’s approach
Sedley LJ agreed in the result but offered a different analytical framework. He emphasised that the most a beneficiary of a current policy can legitimately expect in substantive terms is that the policy will be fairly applied in their particular case and that any alteration will not unfairly frustrate legitimate reliance. He considered that the transitional provisions, though ‘parsimonious and largely arbitrary’, did enough to cushion the impact of a permissible policy change. He expressly endorsed the approach in Hamble Fisheries and stated that the description of that decision as ‘heretical’ in Ex parte Hargreaves was ‘shown by a solid body of authority both before and since to have been mistaken’.
Practical Significance
This decision is of considerable importance for the development of legitimate expectation doctrine. It establishes a structured taxonomy distinguishing three categories of legitimate expectation — the paradigm procedural case, the substantive case, and the secondary procedural case. It confirms that the mere existence of a policy, without a specific promise or assurance directed at identifiable individuals, is insufficient to generate an enforceable expectation. The case underscores that government retains broad discretion to change policy, and that the courts will only intervene where the impact on affected persons is ‘pressing and focussed’ and where the change amounts to an abuse of power. The decision also confirms that reasonable transitional provisions, even if perceived as ungenerous, may satisfy any legitimate expectation that arises. The differing approaches of Laws LJ and Sedley LJ — noted but not resolved by the Master of the Rolls — leave open for future development the question of whether substantive legitimate expectations should be analysed through the lens of specific undertakings or through the broader principle of fair treatment of legitimate reliance.
Verdict: Both appeals were dismissed. The Court of Appeal held that neither the applicants nor the solicitors possessed enforceable legitimate expectations — whether procedural or substantive — that were breached by the Secretary of State’s withdrawal of the discretionary compensation scheme or the Independent Assessor’s reduction of recoverable legal costs to Legal Help rates.
Source: R (on the application of Bhatt Murphy (a firm)) v The Independent Assessor </em> [2008] EWCA Civ 755
