The Legal Services Commission faces a £300,000 bill for the Law Society’s legal costs, after losing a High Court battle over its family tender process.

The LSC said it could not disclose how much it had spent on its own legal fees in defending the action, as the figure had ‘not been finalised’.

The court ruled on Thursday that the LSC’s tender process for family legal aid contracts was unlawful, and effectively quashed the outcome, which would have reduced the number of family providers from 2,400 to 1,300. It ordered the LSC to pay the Law Society’s costs, which amount to £300,000.

The LSC will also have to pay its own costs. It said this figure has not been finalised, but it is likely to be ‘substantially less’ than the Law Society’s costs.

The three other parties who were given permission to intervene – the Creighton Group (representing around 70 firms), the National Youth Advocacy Service and London firm Lock & Marlborough – will all bear their own costs.

The ruling followed a three-day hearing in the Divisional Court. The Law Society instructed solicitor Stephan Grosz, human rights and public law partner at London firm Bindmans, and was represented by Dinah Rose QC of Blackstone Chambers and Maya Lester of Brick Court Chambers.

The LSC used its own in-house legal team led by Ruth Wayte, and was represented by Clive Lewis QC, Paul Nicholls and Michael Lee, all of 11 King’s Bench Walk.

Lord Justice Moses said the LSC’s failure to give adequate notice of the selection criteria meant it had ‘arbitrarily and unfairly’ distinguished between providers, and deprived some of those most in need of the opportunity to obtain the services of experienced family lawyers.

He said the failure to give notice was ‘irrational’ and defeated the LSC’s own objective of obtaining high-quality services from the most well-qualified and experienced lawyers.

LSC chair Sir Bill Callaghan said the LSC was ‘disappointed’ by the result, and is considering the judgment and its implications, including whether or not to appeal.

A statement on the LSC website said it was conscious of the uncertainty for providers and would publish further information in due course.

Law Society president Linda Lee said: 'The failure of the LSC to anticipate, let alone manage, the outcome of the process was the latest and perhaps most alarming of the LSC's apparently haphazard attempts to reshape legal aid.’