Claimant fails in judicial review challenge over Qualified One-Way Costs-Shifting and discrimination claims

February 24, 2020

A High Court judge has rejected a judicial review challenge over an asserted decision of the Lord Chancellor not to extend Qualified One-Way Costs-Shifting (QOCS) to discrimination claims in the County Court and/or the failure to extend QOCS to such claims.

In Leighton, R (On the Application Of) v The Lord Chancellor [2020] EWHC 336 the claimant, a disabled wheelchair user, contended that the decision or failure at issue was contained in or reflected by the contents of a document entitled "Post-Implementation Review of Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO), Civil Litigation Funding and Costs." ("the Part 2 PIR").

The Part 2 PIR was published by the Ministry of Justice on 7 February 2019, following a review of the operation of certain aspects of LASPO. The review involved a consultation exercise.

The Lord Chancellor contended that no decision had yet been taken as to whether to extend QOCS, or some other form of costs protection, to discrimination claims in the County Court.

Over the last few years, the claimant has frequently issued proceedings in the County Court, mainly as a litigant in person, against service providers. These claims mostly took the form of complaints that shops, cafes, etc had discriminated against her by not providing ramps for wheelchair users, meaning that wheelchair users could not gain access to the premises. This is potentially in breach of the statutory duty to make reasonable adjustments in relation to service provision, which is to be found in the Equality Act 2010.

Mr Justice Cavanagh said that, in essence, the claim was concerned with the costs regime that applies to discrimination claims relating to the provision of services, when such claims are allocated to the fast-track and multi-track in the County Court.

As a result of reforms that were introduced by LASPO, it is no longer possible for a Court to order an unsuccessful defendant in such proceedings to pay the "success fee" to which a successful claimant's lawyers may be entitled if the claim succeeds and the lawyers are instructed under a Conditional Fee Agreement ("CFA"), or to pay the cost of After the Event ("ATE") insurance premiums.

The claimant said this meant that disabled persons like her who wished to take legal proceedings to enforce their rights against service providers faced two very serious impediments. The first was that if their claims ended up in the fast-track or the multi-track (rather than the small claims track, in which costs are not usually recoverable), and they did not qualify for legal aid, they were at risk of an adverse costs order.

It was argued that given that the damages recoverable for claims such as these tended to be small, but the costs incurred by defendants might be significant, this operated as a real deterrent. Also it was said claimants could not realistically protect themselves by using ATE insurance, because the cost of the premium would be prohibitive, especially if it could not be recovered by means of a costs award against the defendant.

The second impediment was that it was very difficult, and might be impossible, for a claimant in a disability discrimination claim in the County Court to find solicitors and counsel who were prepared to represent them. The judge said that ordinarily, solicitors and counsel in such cases would seek to be paid by means of a CFA, but, as the success fees which were a central feature of CFAs could no longer be passed on to defendants, and damages were generally low, this meant that the lawyers could not be confident that their clients would be able to pay the success fee, even if they win.

The claimant said that she was now effectively deterred from seeking to enforce her rights as a disabled person in relation to the provision of services in the County Court.

These problems are not unique to discrimination cases, Mr Justice Cavanagh noted. In the personal injury field, their effects had been mitigated by QOCS.

The operation and impact of LASPO was reviewed by the MoJ in the Part 2 PIR in 2019, six years after the changes came into effect. The Part 2 PIR dealt briefly with the question whether costs protection, which might include QOCS, should be extended to discrimination claims.

The claimant said that the effect of the Part 2 PIR was that the defendant took a decision not to extend QOCS to discrimination claims. She submitted that this decision was unlawful on public law and/or human rights grounds. Alternatively, she said that, in any event, even if no positive decision was taken at the time of the Part 2 PIR, it was clear that the Lord Chancellor had failed to extend QOCS to discrimination cases and this, too, was unlawful.

The claimant relied on five grounds. These were that the decision not to extend QOCS to discrimination claims and/or in failing to extend QOCS to discrimination cases was unlawful because:

(1) The defendant failed to comply with the Public Sector Equality Duty;

(2) The defendant (a) acted irrationally, (b) failed to take account of relevant considerations, and (c) failed in his duty of inquiry;

(3) The defendant was in breach of Article 6 of the European Convention on Human Rights ("ECHR"), introduced into UK law by Schedule 1 to the Human Rights Act 1998;

(4) The defendant was in breach of Article 14 of the ECHR, read with Article 6; and/or

(5) The defendant was in breach of the common law right of access to a court.

The Lord Chancellor's main argument in opposition to the claimant's claim was that he had not yet taken a decision as to whether or not to extend some type of costs protection, of which QOCS was only one form, to discrimination claims. He said that this was under active consideration, though it was likely to be some time before a decision was taken.

Therefore, the Lord Chancellor submitted, the argument based on the proposition that a decision on this issue had already been taken was misconceived. In addition, he submitted that the challenge on the basis that he had acted unlawfully by failing to extend QOCS to discrimination cases was premised on the existence of a mandatory obligation to provide for QOCS in discrimination cases. The defendant submitted that none of the five grounds set out by the claimant came anywhere near to providing for such an obligation.

Mr Justice Cavanagh found that:

He did not exclude the possibility that the time might come, at some point in the future, when inaction on the part of the Lord Chancellor might amount to a de facto decision that QOCS should not be extended to discrimination cases. However, no final decision had been taken by the defendant and the MOJ as to whether there should be a pilot scheme or a consultation exercise. If there was such a scheme and/or such an exercise it would, probably, result in a decision. “But if the MOJ decides instead to do nothing and, to use the old cliché, to kick the issue into the long grass, a point may be reached, in my judgment, when the practical reality would be that the Defendant had taken a definite decision not to extend QOCS to discrimination cases. However, that point has not been reached yet.”
He did not accept that the defendant was in breach of the PSED in relation to the potential extension of QOCS to discrimination cases.
There were cumulative reasons why, in his judgment, the irrationality argument could not succeed. It was plain that it was within the scope of rational decision-making for the defendant to decide that he needed more research and analysis before taking a decision on extending QOCS to discrimination claims in the County Court. Also, notwithstanding the cogent points that the claimant advanced in favour of extending QOCS to discrimination claims, he was not in a position to conclude at this stage that it would be irrational for the Lord Chancellor to take a different view.
It could not be said that the only rational decision that the defendant could have taken in February 2019 was that QOCS should be extended to discrimination claims in the County Courts. “I am reinforced in my view by the fact that these are considerations of financial and social policy, and involve the exercise of political judgment and assessments of various competing factors, which the Defendant is better and more appropriately placed to evaluate than a judge would be.”
He did not accept the claimant's submission that the current costs regime for discrimination claims in the County Court was in breach of Article 6. “On the basis of the limited evidence available, and applying the appropriate legal test, the costs regime is a proportionate means of achieving a legitimate aim. I add that, even if the matter were not currently under active consideration by the Defendant and the MOJ, my conclusion would still be that the current regime for costs in discrimination cases is not in breach of Article 6.”
If there was scope for a free-standing challenge based on the common law right of access to the courts, it did not add anything to the Article 6 challenge. If the Article 6 challenge succeeded, the common law challenge would succeed, and vice versa. For the same reasons for rejecting the Article 6 challenge, he rejected the challenge on the basis of the common law right of access to a court.
The Lord Chancellor acted proportionately in deciding that he should make use of QOCS in personal injury cases but was not in a position to form a clear view as to whether he should introduce QOCS for discrimination cases. The defendant had satisfied him that the differences in costs regimes between discrimination claims and personal injury claims in the County Court were a proportionate means of achieving a legitimate aim. He rejected the claimant's ground of challenge based on Article 14, read with Article 6.
Reference to the UNCRPD did not make a difference to his conclusions in relation either to the Article 6 challenge or the Article 14 challenge.

The judge therefore rejected the claim.