Birmingham Law Centre Blog

By Emily Johnson

Introduction

On 13 May 2010 Liam Byrne MP, former Chief Secretary to the Treasury, somewhat ominously forewarned his successor that “there is no money”. The latest figures indicate that the UK has amassed a national debt totalling £770 billion, upon which it is paying interest at the annual rate of around £43 billion.  

It is estimated that the legal aid cuts in the Legal Aid, Sentencing and Punishment of Offenders Bill will achieve cost savings of £350 million. However, as I shall argue in this article, the projected cost savings represent a false economy. In my view, the provisions in the Bill are likely to spell the end of neighbourhood Law Centres and will result in legal aid practitioners moving out of legal aid work, if not leaving the profession altogether.

The Role of Law Centres in Deprived Communities  

There are at present 56 Law Centres across England, Wales and Northern Ireland. These are not-for-profit organisations which provide free legal advice and representation to local communities, predominantly in relation to housing, debt, employment and welfare benefits. Law Centres receive payments from the Legal Services Commission on a case by case basis, under a standard legal aid contract. Figures released by the Law Centres Federation show that one in three Law Centres rely on legal aid contracts to provide at least 60 per cent of their annual funding. A number of Law Centres receive annual local authority grants in addition to legal aid funding, but such arrangements are becoming increasingly rare and in any event are generally quite modest in value.    

On 13 May 2010 I was working at Saltley and Nechells Law Centre in Birmingham, in the heart of Liam Byrne MP’s Hodge Hill constituency. The reality of there being “no money” was becoming horribly clear.

Saltley and Nechells Law Centre was sited in one of the most deprived areas of the country. The Hodge Hill Constituency recorded the second highest rate of unemployment benefit claims in the UK in May 2010, according to figures published by the House of Commons on 16 June 2010, in Research Paper 10/43. Hirsch and Beckhelling, on behalf of the Campaign to End Child Poverty, estimated that 45 per cent of the children in the Hodge Hill Constituency were living below the poverty line in 2010.  

Over a twenty year period the Law Centre played a key role in facilitating access to justice in the community, by providing publicly funded housing, debt and welfare benefits advice and representation to local citizens. Within a mere six weeks of my appointment, I was offering legal advice to some of the most vulnerable members of society, including victims of political torture, domestic violence victims, people with substance abuse issues as well as those detained under the Mental Health Act.

The Law Centre was involved in a number of ground-breaking cases and performed its role with a high degree of success. In particular, it represented the appellant in a landmark decision against Walsall Metropolitan Borough Council, in which the First-tier Tribunal (Social Entitlement Chamber) held that the Local Housing Allowance Regulations discriminate against people who require an extra bedroom for a live-in carer, thereby contravening the European Convention on Human Rights.

The Plight of Law Centres under the Current Legal Aid Scheme

However, the Law Centre was experiencing financial pressures on an unprecedented scale. The overheads involved in running even a modest community Law Centre are high. These include the rent of premises, the salaries of solicitors, fee earners and administrative staff, fuel bills, telephone bills, stationery, postage, professional indemnity insurance premiums, photocopier hire fees and subscriptions to practitioners’ texts.

Save for the modest proceeds of its fundraising efforts, Saltley and Nechells Law Centre was dependent on legal aid to fund its service. In respect of each welfare rights case, it received a standard fixed fee of £167.00 excluding VAT. The fixed fee was the equivalent of three hours’ work on the case at an hourly rate of £55.60. The Law Centre was paid on closure of the case, notwithstanding the fact that many cases take several months or even years to close. This was particularly true of cases being appealed to the Upper Tribunal or the Tax Adjudicator.

The Law Centre received no additional remuneration if it spent more than three hours on a case, except where a fee earner spent over nine hours on it. Under these circumstances, it received remuneration for the actual amount of time spent on the case, at the rate of £55.60 per hour.

The difficulties with this system are threefold. Firstly it creates an incentive for organisations to cherry-pick those cases which can be closed with the minimum amount of time and effort. The Law Centre refused to cherry-pick cases and as a result, found it difficult to make publicly funded work financially viable. However the deployment of a cherry-picking strategy defeats the concept of access to justice – the very raison d’etre of a legal aid scheme.    

Secondly, the system creates an anomalous situation, where a case that falls just short of the three times limit is only paid at a fraction of its true value. Under these circumstances, legal aid practitioners might be tempted to generate unnecessary costs purely to tip the case into the “exceptional category”, thereby generating a fee which befits the actual level of time and effort invested in the case.

Thirdly, and perhaps most fundamentally, the overwhelming majority of cases fall between these two extremes. These cases result in a net loss to the organisation, since the value of the work conducted on the case exceeds the standard fixed fee payable. From a purely financial perspective, these are the least desirable cases to open.

The upshot was that the level of remuneration available for legal aid work was simply insufficient to meet the Law Centre’s overheads. The poor rate of remuneration created severe cash flow problems, resulting in the deferral of staff salaries. On 13 October 2010, having assisted thousands of clients over a twenty year period, the Law Centre went into administration.  

The closure of the Law Centre has had the following impact on the local community:

Ø       Tenants are now less likely to oppose applications for possession orders, which may lead to an increase in evictions and homelessness in the constituency. According to a report by the New Economics Foundation each local authority eviction will cost the taxpayer £34,000, compared to the £174 cost of 9.5 hours of legal advice.

Ø       Employees who are unfairly dismissed by their employers are now less likely to seek legal advice, with the result that valid claims are less likely to be identified and brought within the limitation period.

Ø       Unfavourable welfare benefit decisions are now less likely to be appealed, leading to lower household incomes, increased child poverty and increased social exclusion. Figures published by the Ministry of Justice on 1 December 2011 reveal that 40% of First-Tier Tribunals (Social Entitlement Chamber) find in favour of appellants appealing against decisions not to award them incapacity benefit.

Ø       Local citizens facing debt are now less likely to seek advice, resulting in an increase in bankruptcy orders and mental illness in the area.  

The Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO)

In the current economic climate, the need for neighbourhood Law Centres has never been greater. However, far from investing in them, the Government is doing the exact opposite.

The new LASPO Bill proposes to abolish entitlement to legal aid altogether in respect of employment law, welfare benefits and debt which does not threaten homelessness. Housing law will face a 40 per cent reduction in scope. The proposals will therefore remove the bulk of legal aid funding from Law Centres’ main practice areas, leaving them without the financial means to continue their work. Furthermore, the Law Centres that currently receive local authority funding will face a 53 per cent cut in their annual funding over the coming year.

The cumulative effect of cuts in legal aid and local authority funding will be to starve Law Centres of much needed funds and force them to close. It is therefore likely that the experience of Saltley and Nechells Law Centre will become a more regular occurrence.   

 

Emily Johnson LLB member of Middle Temple, spent a year working with Saltley and Nechells Law Centre and now volunteers with Birmingham Law Centre.

This article first appeared in the March 2012 edition of Counsel Magazine .

Sanneh v Secretary of State for Work and Pensions : Adjourned High Court hearing listed for 30 April 2012.

Birmingham Law Centre are applying for interim relief within judicial review proceedings pending statutory Income Support appeal on basis case comes within Zambrano principles and such relief necessary to give effect to EU law.

At the same time as appealing against the decision to refuse to award Income Support, we assisted Ms Sanneh with an application for interim payments of Income Support on account, pending the outcome of the client’s appeal to a First-tier Tribunal.  After her appeal was allowed by a First-tier Tribunal on 28 November 2011, the Department sent a letter to our client advising her that they ‘cannot’ pay Income Support as they had asked for a statement of reasons and were considering a further appeal to the Upper Tribunal.

We immediately notified the High Court in Birmingham and were given a date for a renewal hearing.  Unfortunately, the Tribunals Service did not produce the statement of reasons for the appeal decision until the day before the hearing which was held on 7 February 2012.  The Department were able to argue that they simply hadn’t had sufficient time to consider whether or not they would appeal to the Upper Tribunal and successfully argued for an adjournment.  They also said that the question in front of the Court could no longer be about interim payments as, following the First-tier Tribunal’s decision, benefit had been suspended.  The DWP therefore argued that the judicial review (in respect of the decision to refuse interim relief) was academic and should be dismissed or the application should be adjourned while it considered whether to appeal.  However, HHJ Purle accepted that if the Secretary of State were to decide not to appeal then payment of benefit would be restored and there would be nothing for the Court to determine.  HHJ Purle (sitting as a deputy Judge of the High Court) adjourned the hearing for a month and reserved it to himself.  The case has now been listed for 30 April 2012.

The outstanding issue in the Administrative Court is whether the decision to suspend payment of Income Support whilst the Secretary of State appeals to the Upper Tribunal is lawful.

We have always argued that Ms Sanneh’s daughter’s rights under European Union law as declared by the Zambrano judgment cannot be given full and immediate effect unless the High Court grants interim relief - R v Secretary of State for Transport, Ex p Factortame Ltd (No 2) is authority for this.  Factortame also established that in social welfare cases, where damages are not appropriate, the ‘balance of convenience’ test for granting interim relief is modified to include a consideration of the wider public interest.  When this is applied to a case involving European law, the applicant will only cross that threshold if they can demonstrate that there is a strong prima facie case (or a strongly established case on the merits) that the national measure being challenged is incompatible with EU law.

In his reasons for refusing the application for interim relief on 22 September 2011 HHJ Judge Robert Owen (sitting as a Judge of the High Court) said that the balance of convenience does not support the making of a mandatory order as the Claimant’s contention that she has a derived right of residence is ‘weak’ for the reasons given by the Secretary of State (in his Acknowledgement of Service).

We believe that the subsequent decision of the First-tier Tribunal to award Income Support proves that Ms Sanneh’s case is clearly not weak and that she should be granted interim relief.  It will be for the Court to take a ‘provisional view’ of the merits and then determine whether interim relief is necessary to avoid a breach of EU law.

The client is being represented by Desmond Rutledge of Garden Court Chambers who has provided assistance with both the judicial review and the statutory appeal.

We would still like to hear from practitioners with similar cases and are willing to offer help where we can.  We can send you a copy of the (anonymised) statement of reasons for the Income Support appeal decision.  Contact us at .  Please also contact us to refer clients in similar circumstances.

Michael Bates

March 2012

Birmingham Law Centre takes Court of Appeal challenge to Local Housing Allowance ‘size criteria’ arguing scheme restricting number of bedrooms applicants can claim for is unlawful and disproportionate.

This week, Birmingham Law Centre will take one of three joined cases to the Court of Appeal in order to challenge to the Local Housing Allowance (LHA) rule (‘the size criteria’) which prescribes the number of bedrooms that a claimant can qualify for when a claim for Housing Benefit is made in the private rented sector.  The complaint, in essence, is that the size criteria within the LHA scheme introduced in April 2008 is unlawful because it does not make any allowance for the needs of severely disabled people who require live-in care (where the carer is not also an occupier).

The size criteria also ignores the needs of disabled claimants who need an additional room to store medical equipment and the needs of claimants who have disabled children where it is unreasonable for them to share the same room.  Hence, when granting permission to appeal, Judge Jacobs said that the issue raised by this appeal “arises on a variety of factual circumstances”.  The law has since been changed, effective from April 2011, allowing for LHA to cover the cost of an additional room for use by an overnight carer.  However, we have been allowed to continue with the appeal on the basis that there are a wider range of housing needs for disabled people and the principles involved are of public interest.

Birmingham Law Centre’s client, Miss Lucy Trengove, was a severely disabled young lady born with hydrocephalus and severe cerebral palsy.  She was regarded as someone with severe learning difficulties, was registered blind and suffered from epilepsy.  Sadly, Lucy died during Christmas last year but her case is continuing on the basis that everyone concerned considers that her case raises issues of fundamental importance.  The Legal Services Commission has agreed to fund Lucy’s mother so that the case can continue.

Lucy’s case is that the State’s failure to recognise her essential housing needs due based on her status as a severely disability person is disproportionate and therefore cannot be justified.  She will rely on the principle that treating persons who are in significantly different situations the same is prima facie discriminatory under Article 14 of the European Convention of Human Rights where it is the housing needs of a severely disabled person which is the feature that makes the situations significantly different.

Lucy was adversely affected by the lack of any modification to the size criteria because it meant that she could not claim Housing Benefit to cover the additional bedroom as of right and the resulting uncertainty about who or how the resulting shortfall in her rent would be met represented a significant barrier to her ability to achieve ‘independent living’, i.e. her ability to have choice and control the care she receives and equal access to housing of her choice.

Jan Jesson started work on this case three years ago at Saltley and Nechells Law Centre before joining us at Birmingham Law Centre.  Jan has taken this case to the Court of Appeal with the assistance of Desmond Rutledge at Garden Court Chambers.  Good luck to both Jan and Desmond for later this week.  We hope to post another article after the hearing…