The Law Society has filed a judicial review application in a move to block new government regulations restricting the costs that can be recovered by acquitted defendants. Regulations that came into force on 31 October 2009 cap at legal aid rates the costs recoverable by acquitted defendants who have paid privately for their defence.

The Law Society said the ‘unlawful and grossly unfair’ new scheme would leave people with ‘crippling costs’ despite winning their cases. It has instructed London firm Kingsley Napley to act.

Chancery Lane warned that the new regulations will deter innocent people from seeking advice to clear their name and could lead to many miscarriages of justice.

Robert Heslett, Law Society president, said: ‘The Law Society’s view is that the new regulations are unlawful and that successful defendants are entitled to reasonable compensation for costs that they have properly incurred. This is the test set out in the Prosecution of Offences Act 1985. Payment on this basis can work out at much more than legal aid rates.’

Stephen Parkinson, senior partner at Kingsley Napley, said: ‘People do not choose to be prosecuted. Where they are prosecuted and then acquitted, it is grossly unfair that under the new scheme they only get back a fraction of their costs.

‘By contrast, successful prosecutors are entitled to recover their "just and reasonable costs" which can work out at much more than legal aid rates. This underlines the inequality of the new scheme.’

The Law Society’s action is backed by the Police Federation of England and Wales. The federation claims police officers are more frequently the subject of criminal proceedings than other members of society.

The administrative court will decide in approximately six-eight weeks whether or not to grant permission to proceed. If the Law Society is granted permission, the matter will be listed for a final hearing around April 2010.

The Law Society has issued a practice note to help solicitors representing successful criminal defendants in this situation. It advises that they can make applications to the judge at the conclusion of the case for summary assessment of costs. The Law Society believes that, on assessing such applications, judges should apply the ‘reasonable compensation’ test.

A Ministry of Justice spokesperson said: 'The UK has one of the most generous legal aid systems in the world and continues to provide a vital link to justice for so many people. A recent report comparing publicly funded legal advice across the world concluded that the number of cases supported per capital in England and Wales was higher than for any of the other countries in respect of both criminal and non-criminal legal aid.

'While the government accepts that acquitted defendants should continue to have access to central funds, it is essential that we also target our resources effectively, secure value for money for the taxpayer and control areas of overspend in our budget.

'We believe that the rates we pay for criminal cases under legal aid are both fair and sustainable and should be available on the open market. We also believe it is fair to taxpayers that those who can afford to pay for all or part of their legal representation do so.

'We believe that lawyers are able to provide a reasonable service at legal aid rates, but if a defendant wants to have, for example, a senior partner’s undivided attention, they may be prepared to pay more for a "premium service", but would have to understand that they would not recover all of these costs.'