Callery v Gray, (2002)

House of Lords

Status: [2002] UKHL 28

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Callery v Gray, (2002)

HOUSE OF LORDS

Lord Bingham of Cornhill Lord Nicholls of Birkenhead Lord Hoffmann Lord Hope of Craighead Lord Scott of Foscote

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE

STEPHEN CALLERY

(RESPONDENT)

CHARLES GRAY

(APPELLANT)

ON 27 JUNE 2002

[2002] UKHL 28

LORD BINGHAM OF CORNHILL

My Lords,

1. For nearly half a century, legal aid provided out of public funds was the main source of funding for those of modest means who sought to make or (less frequently) defend claims in the civil courts and who needed professional help to do so. By this means access to the courts was made available to many who would otherwise, for want of means, have been denied it. But as time passed the defects of the legal aid regime established under the Legal Aid and Advice Act 1949 and later statutes became more and more apparent. While the scheme served the poorest well, it left many with means above a low ceiling in an unsatisfactory position, too well off to qualify for legal aid but too badly off to contemplate incurring the costs of contested litigation. There was no access to the courts for them. Moreover, the effective immunity against adverse costs orders enjoyed by legally-aided claimants was always recognised to place an unfair burden on a privately-funded defendant resisting a legally-aided claim, since he would be liable for both sides' costs if he lost and his own even if he won. Most seriously of all, the cost to the public purse of providing civil legal aid had risen sharply, without however showing an increase in the number of cases funded or evidence that legal aid was directed to cases which most clearly justified the expenditure of public money.

2. Recognition of these defects underpinned the Access to Justice Act 1999 which, building on the Courts and Legal Services Act 1990, introduced a new regime for funding litigation, and in particular personal injury litigation with which alone this opinion is concerned. My noble and learned friend Lord Scott of Foscote makes full reference to these Acts and the relevant subordinate legislation made under them in his opinion, which I have been privileged to read in draft, and I gratefully adopt his account which I need not repeat. The 1999 Act and the accompanying regulations had (so far as relevant for present purposes) three aims. One aim was to contain the rising cost of legal aid to public funds and enable existing expenditure to be refocused on causes with the greatest need to be funded at public expense, whether because of their intrinsic importance or because of the difficulty of funding them otherwise than out of public funds or for both those reasons. A second aim was to improve access to the courts for members of the public with meritorious claims. It was appreciated that the risk of incurring substantial liabilities in costs is a powerful disincentive to all but the very rich from becoming involved in litigation, and it was therefore hoped that the new arrangements would enable claimants to protect themselves against liability for paying costs either to those acting for them or (if they chose) to those on the other side. A third aim was to discourage weak claims and enable successful defendants to recover their costs in actions brought against them by indigent claimants. Pursuant to the first of these aims publicly-funded assistance was withdrawn from run-of-the-mill personal injury claimants. The main instruments upon which it was intended that claimants should rely to achieve the second and third of the aims are described by my noble and learned friend: they are conditional fee agreements and insurance cover obtained after the event giving rise to the claim.

3. At the time when the 1999 Act was enacted and brought into effect, new Civil Procedure Rules were also in the course of being implemented. The objects underlying these rules were not new, but the rules gave a sharply increased emphasis to the need for expedition in the conduct of legal proceedings, to the need for simplicity and to the need to avoid unnecessary and disproportionate costs. To achieve these ends new and detailed procedures were devised to moderate the traditional adversarial approach to the making and defending of claims. There was inevitably a bedding-down period during which both judges and practitioners adjusted to the practical implications of the new procedural regime to which they were required to give effect.

4. If the objects underlying the new procedural regime were not new, those underlying the new funding regime were. Arrangements which had until relatively recently been professionally improper were to become the norm. It was however evident that the success of the new funding regime was threatened by two contingencies which, had they occurred, could have proved fatal. One was that lawyers, in particular solicitors, would decline to act on a conditional fee basis. To counter that risk the maximum permissible uplift, o...

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