Dipping into central funds


Whatever the difficulties caused by the reintroduction of the means test on 2 October 2006, via the Criminal Defence Service Act, it is clear that there will be a substantial increase in the number of bills that will be paid from central funds. The jurisdiction to make such an order exists under section 16 of the Prosecution of Offences Act 1985 and under the Costs in Criminal Cases (General) Regulations 1986.



The case law requires that if a client is acquitted or the proceedings are discontinued or discharged, then an order from central funds for payment of any liability the client has for costs shall be made, unless they have both brought the proceedings on themselves and misled the Crown as to the strength of the evidence against them (see R v SW Surrey MC ex parte James [2000] Crim LR 690).



Where a case was dismissed for failure by the key prosecution witness to attend (through no fault of the defendant), good reason was required to refuse a defendant's costs order - and the strength of the evidence was not such a reason (Hassan v UK ECHR (2006) The Times, 5 April).



However, when a bill is paid from central funds, it is the client's liability that is being met. It does not matter whether he has actually paid over monies to the solicitors, provided the liability does exist (R v Liverpool City JJ ex parte McCormick and Larkin [2001] 2 All ER 705). This makes the writing of client-care letters a matter requiring particular care. If there is a fixed fee or a fixed hourly rate, then those figures cannot be increased on the making of the central funds order.



In R v Cowie [2006] 2 Costs LR 375, a third party (the medical defence union) had agreed a rate with the solicitors to represent a member, and no higher figure could be paid from central funds. The costs of preparing the central funds bill cannot be recovered but an agreed hourly rate may include travel and waiting time (R v Villiers [2005] 4 Costs Law Reports 732). The existence of any form of representation order (even one limited to counsel only) prevents any payment for solicitors while the order is in force (R v Grant [2006] 1 Costs LR 173) but pre-legal aid costs may be recovered (R v Hereford MC ex parte Farrell (DC 23 November 1999)). This includes any costs incurred by the client during the criminal investigation that led to charge (R (Hale) v North Sefton JJ (2002) The Times, 29 January).



The Supreme Court Costs Office has offered advice as to what represents reasonable costs for solicitors in every area of the country. This guidance is now also available on the Legal Services Commission website in the section dealing with means testing and hardship.



The guide was originally prepared for civil cases, but the costs of running a solicitor's office apply irrespective of the type of law in which they specialise, and the guidance is therefore of general application. However, it is prepared on the basis of four grades of fee-earner rather than the three grades with which solicitors are more used to dealing. The guide defines how the grades are used. The figures are inclusive of care and attention at 50% and should be increased where a higher uplift can be justified because of the nature of the case or the client, or of the solicitor's handling of either of those.



Fee-earner grades



To establish the correct hourly rate to be applied to any claim, it is necessary to establish the grade of fee-earner who will actually and reasonably carry out the work concerned. The categories of fee-earner detailed here are not fixed but will be applied unless circumstances dictate otherwise.



The grades of fee-earners have been agreed between representatives of the Supreme Court Costs Office, the Association of District Judges and the Law Society. The categories are as follows:



l Grade A. Solicitors with more than eight years' post-qualification experience, including at least eight years' litigation experience. Grade A rates are normally reasonably incurred in indictable proceedings and in serious either-way cases, summary cases where the consequences may be grave for the client, in cases involving potentially difficult or dangerous clients, or in cases involving novel or difficult points of law.

l Grade B. Solicitors and legal executives with more than four years' post-qualification experience, including at least four years' litigation experience.

l Grade C. Other solicitors, and legal executives and fee-earners of equivalent experience.

l Grade D. Trainee solicitors, paralegals and other fee-earners



The applicable hourly rate is that for the area in which the court that will hear the case is located.



By Anthony Edwards, TV Edwards, London