Controversial rules to cap the costs recovered by acquitted defendants were struck down as ‘unlawful’ by the High Court in a victory for the Law Society this week.

The regulations, which are now invalid, were introduced in October 2009 and sought to ensure that acquitted defendants who paid privately for their defence could not claim back more than legal aid rates for their legal fees, regardless of how much they actually paid.

The Law Society challenged the lawfulness of the scheme, introduced by the former justice secretary Jack Straw, arguing that he acted for improper purposes.

Instead of using his powers to provide reasonably sufficient compensation to successful defendants, as required by statute, the Society argued that the justice secretary exercised his powers to effect savings in public funds and influence the market for private legal services.

Giving judgment, Lord Justice Elias said the new regulations involved a ‘decisive departure from past principles’ and ‘jettison’ the notion that defendants should not have to pay to defend themselves against what might be wholly false accusations.‘Any change in that principle is one of some constitutional moment,’ he said. Elias questioned whether parliament would have sought to achieve such a change through delegated legislation without proper scrutiny.

Law Society chief executive Desmond Hudson said the decision was a victory for the Society on behalf of innocent people who have been prosecuted by the state. Opposition to the policy was a key plank of the Law Society’s manifesto in the run up to the general election.

‘We are glad [this] has been halted in its tracks. We recognise that there are severe financial constraints on the Ministry of Justice budget, but we would urge the government not to seek to overturn this judgment,’ he said.

An MoJ spokesperson said the ministry is considering its options and did not rule out challenging the judgment.‘The scheme was designed to prevent spiralling legal costs while still ensuring access to appropriate legal support, and so we are disappointed with the ruling that it cannot continue,’ he said.

The Law Society has advised that solicitors who have had costs orders assessed under the now invalid regulations should seek a redetermination of the assessment, and should lodge their requests within 21 days of Tuesday’s judgment.