Strand, London, WC2A 2LL
B e f o r e :
MR JUSTICE BENNETT
MR JUSTICE PITCHFORD
| The Queen on the application of
London Borough of Hillingdon
Leeds City Council
Liverpool City Council
Norfolk County Council
|- and -
|(1) The Lord Chancellor
(2) Secretary of State for Communities And Local Government
(1) The Law Society
(2) National Society for the Prevention of Cruelty to Children
Samuel Grodzinski (instructed by Treasury Solicitors) for the Defendants
Mark Vinall for the Law Society as Intervener
Lucy Theis QC, Hilton Harrop-Griffiths and Alistair Macdonald for the N.S.P.C.C as Intervener
Hearing date: 22, 23 and 24 October 2008
Crown Copyright ©
Lord Justice Dyson:
"if it is satisfied (a) that the child concerned is suffering, or is likely to suffer, significant harm and (b) that the harm, or likelihood of harm, is attributable to (i) the care given to the child, or likely to be given to him if the order were not made, not being what it would be reasonable to expect a parent to give to him; or (ii) if the child is beyond parental control."
The History of Court Fees
"In contrast to non-family claims, the Lord Chancellor has concluded that for certain types of Family proceedings it would be wrong to set fees purely on the basis of the cost of the service provided by the courts. The Lord Chancellor considers that the issues at stake in Children Act applications, adoptions, and domestic violence applications, warrant an element of public subsidy. This is to ensure that would-be litigants are not deterred from seeking, for example, contact with their children or freedom from physical violence, because they cannot readily pay the full cost of the proceedings."
"13. To agree and deliver financial objectives for family business for the 2007 spending review period and beyond. The SR04 66% target was based on achieving 100% cost recovery (net of Remex) for most non-children private law family fees. Different policy considerations may apply to public law care cases, adoption, domestic violence and private law children cases. For example, it is arguable that domestic violence injunctions should not be a fee-charging service at all (because of their urgency and the vulnerability of the applicant)"
"Against this, the general arguments of principle in favour of charging for inter-departmental services are that:
• it promotes the efficient allocation of resources, by providing paying authorities with a greater incentive to use services economically and efficiently; and
• it improves decision-making and accountability by providing greater visibility of the true costs and benefits of the services provided by both the charging and paying authority.
Specifically, HMCS is taking steps to minimise the administrative cost to local authorities of paying magistrates' court fees (not just fees for care proceedings). HMCS is developing a new payment system that should mean local authorities will be able to set up accounts with magistrates' courts allowing them to pay all court fees incurred by single monthly or quarterly payments. This will substantially reduce the administrative cost associated with drawing a cheque in every case.
Social services departments are subject to a clear statutory duty to protect the interests of the children. It would be unlawful for them to avoid taking court proceedings for financial reasons where they considered that to be the appropriate step. Nor, given that the local authority spending settlement reflects the additional pressure, is there any reason to think they would do so. Full-cost court fees will mean, however, that the cost to authorities of court proceedings and alternative social services interventions are set on a comparable basis. This will remove any perverse incentive there may currently be to pursue the former prematurely or unnecessarily when the latter would be more appropriate. This should underpin the revised statutory guidance aimed at encouraging more effective use of pre-application interventions by local authorities.
The move to full-cost fees in April 2008 is timed to coincide with the implementation of reforms designed to make the procedure for care cases speedier and more cost-effective. This provides an opportunity to ensure that the fee-charging structure is aligned with and supports the new procedure."
"The proposed changes will have an impact on local authorities, which pay the fees concerned. The latest local authority spending settlement takes account of this. If the total fees charged under the new structure equal current volumes and costs, the additional cost to local authorities would be about £40 million. This represents about 1% of the £4 billion total budget of social services departments (and a small fraction of one per cent of total local authority spending).
The consultation paper will seek views from local authorities upon whom the increases will fall whether our financial impact assumptions are accurate. If responses indicate legitimate concerns in relation to the timing or the cost we work with DCLG and DCSF to find an acceptable solution before deciding on when they will be implemented.
The new statutory guidance on pre-application interventions and case preparation, and the Public Law Outline, require better preparation of cases by authorities at the outset, but should deliver a speedier and more cost-effective court process.
In so far as the new fees encourage authorities to prepare cases properly and adhere to the Outline, it is likely that more cases will be assessed as suitable for a fast-track approach. This will tend to reduce the total fees paid by authorities relative to the £40 million figure above. However, the extent of this effect is unquantifiable, and likely to be marginal relative to the impact of the Outline generally. Therefore no assumption of such saving is made."
"Mr Cole suggested that finance managers have not been able to find any extra provision for increased court fees in their allocations. The government has added this funding into local authorities' general grant. But we do not want to dictate all their spending priorities, so the settlement now provides greater flexibility. We have been able to move £6.5 billion of resources into grants that are not ring-fenced over the CSR07 period. This means, of course, that we cannot hypothecate funding to services or particular pressures. And there will now be a greater responsibility on individual finance managers. But I am certain that most would welcome the opportunities afforded by increased flexibility.
My colleagues and I at the Ministry of Justice are working with local authorities to ensure it is understood clearly that the additional pressure has been reflected in spending settlements, and built into allocated public spending totals with effect from April 2008. The introduction of the proposals need not and should not have any impact on local authorities fulfilling their statutory duty to protect children at risk."
"During the course of consultation, the Government introduced an adjustment into the local government finance settlement figures to make visible the sums attributable to these proposals. The purpose of this adjustment was to ensure that a valid comparison could be made between 2007-08 and 2008-09 for each authority's grant increase. The authorities generally now recognise that funding has been made available within the revenue support grant. Indeed, the total of £40 million is likely to exceed the total fees payable because it assumes that the maximum fee is paid in each case. In reality, some cases following the new 'Public Law Outline' procedure (implemented this month, introduces revised judicial case management procedures to be introduced in all family courts) will be resolved at earlier stages and pay a lower fee. I therefore believe that we have responded in full to those responses that objected to the proposals on the basis that it was not clear that authorities had been funded, or that they had been insufficiently funded, to pay these fees.
The second main theme of the responses was that authorities would be improperly influenced by financial considerations and would not always act in the best interest of children. Local authorities are under a statutory duty to protect children at risk of significant harm. Both the Local Government Association and the Association of Directors of Children's Services, in their responses to the consultation, confirmed that local authorities are not influenced by cost considerations in their approach to initiating proceedings or in their decisions about appropriate pre-proceedings work. The practical effect of the statutory duty in this instance is to require authorities to ensure that adequate budgetary provision is made to pay the necessary court fees, and to ensure that individual decisions are not affected by budgetary considerations. In practice, most local authorities pay court fees from a legal department or similar central budget, rather than from a children's services budget that is the responsibility of individual social workers making decisions on the ground, with the cost of court fees being a small proportion of the overall cost of child care proceedings. For these reasons, I am satisfied that the proposals do not in fact create a risk that local authorities will neglect their statutory duty causing children to be harmed."
The grounds of challenge
Was there a shortfall in funding?
The first ground of challenge: lack of consultation on the principle
"43. The real obstacle which I think stands in the appellants' way is the difficulty of propounding a principle which reconciles fairness to an adversely affected class with the principles of public administration that are also part of the common law. These are not based on administrative convenience or potential embarrassment. They arise from the separation of powers and the entitlement of executive government to formulate and reformulate policy, albeit subject to such constraints as the law places upon the process and the product. One set of such constraints in modern public law are the doctrines of legitimate expectation, both procedural and substantive. Some have been touched on above – for example the requirements of candour and open-mindedness where either law or established practice calls for consultation. The duty to give reasons is another area in which there has been marked growth. It is not unthinkable that the common law could recognise a general duty of consultation in relation to proposed measures which are going to adversely affect an identifiable interest group or sector of society.
44. 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. If made good, such a duty would bring a host of litigable issues in its train: is the measure one which is actually going to injure particular interests sufficiently for fairness to require consultation? If so, who is entitled to be consulted? Are there interests which ought not to be consulted? How is the exercise to be publicised and conducted? Are the questions fairly framed? Have the responses been conscientiously taken into account? The consequent industry of legal challenges would generate in its turn defensive forms of public administration. All of this, I accept, will have to be lived with if the obligation exists; but it is at least a reason for being cautious.
45. The proposed duty is, as I have said, not unthinkable – indeed many people might consider it very desirable - but thinking about it makes it rapidly plain that if it is to be introduced it should be by Parliament and not by the courts. Parliament has the option, which the courts do not have, of extending and configuring an obligation to consult function by function. It can also abandon or modify obligations to consult which experience shows to be unnecessary or unworkable and extend those which seem to work well. The courts, which act on larger principles, can do none of these things."
"…Thus a public authority will not often be held bound by the law to maintain in being a policy which on reasonable grounds it has chosen to alter or abandon. Nor will the law often require such a body to involve a section of the public in its decision-making process by notice or consultation if there has been no promise or practice to that effect. There is an underlying reason for this. 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. All this is involved in what Sedley LJ described (BAPIO  EWCA Civ 1139 paragraph 43) as the entitlement of central government to formulate and re-formulate policy. This entitlement – in truth, a duty – is ordinarily repugnant to any requirement to bow to another's will, albeit in the name of a substantive legitimate expectation. It is repugnant also to an enforced obligation, in the name of a procedural legitimate expectation, to take into account and respond to the views of particular persons whom the decision-maker has not chosen to consult."
"But the court will (subject to the overriding public interest) insist on such a requirement, and enforce such an obligation, where the decision-maker's proposed action would otherwise be so unfair as to amount to an abuse of power, by reason of the way in which it has earlier conducted itself. In the paradigm case of procedural expectations it will generally be unfair and abusive for the decision-maker to break its express promise or established practice of notice or consultation. In such a case the decision-maker's right and duty to formulate and re-formulate policy for itself and by its chosen procedures is not affronted, for it must itself have concluded that that interest is consistent with its proffered promise or practice. In other situations – the two kinds of legitimate expectation we are now considering – something no less concrete must be found. The cases demonstrate as much. What is fair or unfair is of course notoriously sensitive to factual nuance. In applying the discipline of authority, therefore, it is as well to bear in mind the observation of Sir Thomas Bingham MR as he then was in Ex p Unilever at 690f, that "[t]he categories of unfairness are not closed, and precedent should act as a guide not a cage."
The second ground of challenge: irrationality
"Again we would respectfully agree with the second quotation from the judgment of Simon Brown L.J. What is important to note is that when a fundamental right such as the right to life is engaged, the options available to the reasonable decision-maker are curtailed. They are curtailed because it is unreasonable to reach a decision which contravenes or could contravene human rights unless there are sufficiently significant countervailing considerations. In other words it is not open to the decision-maker to risk interfering with fundamental rights in the absence of compelling justification. Even the broadest discretion is constrained by the need for there to be countervailing circumstances justifying interference with human rights. The courts will anxiously scrutinise the strength of the countervailing circumstances and the degree of the interference with the human right involved and then apply the test accepted by Sir Thomas Bingham M.R. in R v Ministry of Defence, ex parte Smith  QB 517 which is not in issue."
"I wish to make clear that it is not our policy intention, and it would be entirely inappropriate, to use fees as a means of discouraging meritorious applications to the court. We do consider that, in certain circumstances, court fees reflecting the cost of the court services provided can create healthy incentives affecting when cases are initiated and how they are pursued. In this context, they may provide an additional incentive for authorities to ensure that other avenues are explored and cases prepared properly, and to consider at each stage whether a case can be properly resolved without continuing to a final hearing. We consider that it would be possible for authorities to establish financial and management arrangements that allow this, without creating perverse financial incentives that would prevent appropriate cases from being brought."
"There are various means through which consistent application of the statutory guidance and Practice Direction could be promoted:
• the Review recommends further consideration of means to encourage or enforce preparation in accordance with the statutory guidance and Practice Direction. These could include encouragement of greater use of existing powers on cost orders, or through the fees structure so that it better reflects the true costs incurred by poorly prepared applications (the fee paid by local authorities to the court for s31 applications is currently £150; in 2003/04 each s31 application actually cost HMCS £1,200); or the exercise by the court of existing powers to require explanations from senior local authority staff where applications have been inadequately prepared..."
"I am informed by my colleague Rosemary Archer that it is not correct to state that those making decisions about child care proceedings on the ground are not directly responsible for the budgets against which the associated court fee costs will be incurred. The decision to initiate care or supervision proceedings is so significant that it is not taken by the social worker "on the ground" without reference to senior managers who have responsibility for the children's services budget. Managers within Leeds City Council have both operational and financial responsibilities. That is not to say that senior managers within my local authority would be influenced by financial considerations in deciding whether to institute care proceedings: it is simply to say that once again, the Defendants have misunderstood how service responsibility, financial responsibility and risk are managed at a local and operational level. Managers within the Children's Services team are placed in an extremely difficult situation of knowing that they have to balance the budget. Every care application that is authorised will have a significant impact on the Children's Services budget and cuts will have to be made elsewhere (generally in preventative work) to balance the budget. The risk this poses for children is set out in Ms Archer's statement."
"Strong and Prosperous Communities [the October 2006 White Paper on Local Government] set out a clear framework for determining the allocation of funding to increase flexibility and allow local authorities to meet local priorities more efficiently. From 2008 onwards, the presumption for all revenue funding is that it will be delivered through Revenue Support Grant…."
"20. In their skeleton argument (see paragraph 66(1)) the claimants dispute the statement in the detailed grounds of defence (paragraph 36) that it is reasonable to conclude that the distribution of spending on family fees will follow a similar pattern to the distribution of overall spend on children's social care. The context for this statement is the explanation in my earlier witness statement (see paragraphs 28 to 30) of the way in which the Relative Needs Formula for Children's Social Care was derived by analysing information on the numbers and needs of almost every child seen by social services in the sample week of the Children in Need survey.
21. The claimants seek to argue that there are factors independent of the number and neediness of childcare cases seen, that may induce some authorities to take more legal proceedings than others. We have therefore examined other data available to Government on the numbers of children in care in each authority's area who have interim or full care orders, or who have been freed for adoption or had a placement order granted. All these will have been the subject of legal proceedings. The numbers of such children in each authority are highly correlated with the Children's Social Care formula. The correlation coefficient is 0.84, which is high (zero would mean no correlation, and 1.0 would mean 100% positive correlation)."
There has been no challenge to this important evidence.
"34. Given the sensitive nature of public law care proceedings it is important to avoid creating unnecessary financial pressures that could impact negatively on a local authority's capacity to act properly because it is not financially able to do so.
35. We would not expect any local authority to fail to comply with a statutory duty to make an application where the situation meets the requirements on the basis of cost or budgetary constraint. Therefore applications will be made regardless of the pressures.
36. However if the costs of doing so are in excess of the budget available the local authority has to find the balance from other services. It is highly likely that the cost of care proceedings will be found from preventative and early intervention budgets, which could create a vicious circle, by increasing the number of applications made as a last resort because of a failure to intervene earlier. The greater the unfunded increase the greater the budgetary pressure. This is an unacceptable position creating a potential perverse consequence from the proposals as they are currently framed."
The third ground of challenge: failure to have regard to a relevant consideration and/or decision made under a mistake of fact.
The fourth ground of challenge: breach of substantive legitimate expectation.
"I am aware of my hon Friend's point. It was put to me by a number of local authorities that I dealt with during the consultation and also by the Local Government Association. The money in the settlement is intended to cover the full cost of family law settlements as a result of a change in approach by the Ministry of Justice."
The fifth ground of challenge: the retrospectivity point
"6. Fees 2.2(b) and (c) are not payable in respect of an issues resolution hearing, pre-hearing review or final hearing which has been listed on any day between 1st May 2008 and 14th May 2008 inclusive."
Mr Justice Bennett :
"I must note also a difficulty of another type. This concerns the position of young children who have no parent or guardian able and willing to become involved in questioning a care decision made by a local authority. This is an instance of a perennial problem affecting children. A parent may abuse a child. The law may provide a panoply of remedies. But this avails nothing if the problem remains hidden. Depending on the facts, situations of this type may give rise to difficulties with convention rights. The convention is intended to guarantee rights which are practical and effective. This is particularly so with the right of access to the courts, in view of the prominent place held in a democratic society by the right to a fair trial: see Airey v Ireland (1979) 2 EHRR 305, 314, para 24. The guarantee provided by article 6(1) can hardly be said to be satisfied in the case of a young child who, in practice, has no way of initiating judicial review proceedings to challenge a local authority's decision affecting his civil rights. (In such a case, as already noted, the young child would also lack means of initiating section 7 proceedings to protect his article 8 rights.)"
"… the court provides:
- Immediate and effective protection for maltreated children, placing their safety and welfare needs first, while bringing home to parents the serious nature of concerns in a forum that, nevertheless, is independent of the party making the allegations.
- A protected space in which assessments can be undertaken and where serious and time limited considerations can be given to whether parents can change to meet the needs of their children. Courts also control and monitor that process safeguarding children against multiple assessments/examinations.
- A forum in which local authority applicants are accountable for their actions and their plans for children."
"Response to the comments made on full cost recovery
Government's general policy on fee-charging is set out in HM Treasury's Fees and Charges Guide. This makes clear that it is appropriate and desirable to charge for services provided by one department to another (and therefore, even more so, for services within the wider public sector). There are two general reasons given for this:
- it promotes the efficient allocation of resources, by providing paying authorities with a greater incentive to use services economically and efficiently; and
- it improves decision-making and accountability by providing greater visibility of the true cost and benefits of the services provided by charging and paying authority.
In short, the principles of fee-charging policy apply equally to public sector bodies as to other users. Nor is it relevant whether the public body can be said to be acting pursuant of a specific statutory duty or its more general objectives. Indeed, it is axiomatic that court proceedings generally are, or should only be, brought in pursuit of some important objective, whether public policy or access to justice for an individual user. The significance of the issues at stake does not in itself provide a basis for differences in fee policy."
Mr Justice Pitchford: