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Cite as: [2005] ScotCS CSOH_163, [2005] CSOH 163

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McCall v. The Scottish Ministers [2005] ScotCS CSOH_163 (29 November 2005)

OUTER HOUSE, COURT OF SESSION

[2005] CSOH 163

OPINION of LORD CARLOWAY

in the petition of

SHELAGH McCALL

Petitioner

against

THE SCOTTISH MINISTERS

Respondents

for

Judicial Review of a decision of the respondents to adopt the Criminal Legal Aid (Scotland)(Fees) Amendment Regulations 2005 (SSI No 113)

________________

 

Petitioner : Keen QC, DEL Johnston QC; Henderson Boyd Jackson

Respondents: Wolffe; Solicitor to the Scottish Executive

 

29 November 2005

  1. The Regulations
[1]      The Legal Aid (Scotland) Act 1986 (c.47) provides:

"4(1) The [Scottish Legal Aid] Board shall establish and maintain a fund to be known as the Scottish Legal Aid Fund...

(2) There shall be paid out of the Fund

(a) such sums as are, by virtue of this Act or any regulations made
thereunder, due to any...counsel in respect of fees...in connection with the provision...of legal aid...

33(1) ...any counsel...who acts for any person by providing legal aid...shall be paid out of the Fund in accordance with section 4(2)(a) of this Act in respect of any fees...

(2) The [respondents] may, by regulations made under this section, make such provision as seems to [them] appropriate in respect of the fees...of...counsel-

(a) acting in any proceedings for a person to whom legal aid has become
available...

(3) ...regulations made under this section may -

(a) prescribe the work in respect of which fees may be charged;

(b) prescribe rates or scales of payment of fees...allowable and the
conditions under which such fees may be allowed..."

Section 32 prohibits counsel from receiving any additional payments in legal aid cases.

[2]     
The Criminal Legal Aid (Scotland) (Fees) Regulations 1989 (SI No 1491), in its unamended form, provided:

"10(1) Counsel shall be allowed such fee as appears to the auditor to represent reasonable remuneration, calculated in accordance with Schedule 2, for work actually and reasonably done, due regard being had to economy."

Schedule 2, as it was then formulated, stated :

"FEES OF COUNSEL

1. ...fees shall be calculated in accordance with the Table of Fees in this
Schedule.

2. Where the Table of Fees in this Schedule does not prescribe a fee for
any item of work the auditor shall allow such fee as appears to him appropriate to provide reasonable remuneration for work with regard to all the circumstances, including the general levels of fees in the said Table of Fees.

3. The auditor shall have power to increase any fee set out in the Table of
Fees in this Schedule where he is satisfied that, because of the particular complexity of the work or any other particular circumstances, such an increase is necessary to provide reasonable remuneration for the work..."

These provisions, especially that in regulation 10(1), were intended to restrict what had been a much freer hand allowed to the Auditor in fixing reasonable fees under the pre-existing, and relatively simple, non-statutory table of fees. The descriptions of the work in that table, for which specific fee levels were set, had originally been drafted to meet conditions prevalent in the 1970s. However, the Table of Fees in the Schedule to the Principal (1989) Regulations took an almost identical form, other than in the rates payable. Thus, it set daily trial and consultation rates in the various High Court circuit towns and sundry figures for work done in connection with the drafting of appeal documents and appearing at appeal diets. For example, the daily rate for junior counsel appearing on his own in Aberdeen was 330.50 and, for an appeal against conviction, the fee was set at 196.50 per day. The odd amounts reflected percentage inflationary increases from the previous non-statutory figures. The Criminal Legal Aid (Scotland) (Fees) Amendment Regulations 1992 (SI No 1491) substituted the Table of Fees in the Schedule to the Principal (1989) Regulations by increasing the rates, but leaving the descriptions of the work materially unchanged. The Aberdeen trial and the appeal rates for junior counsel increased to 408.50 and 242.50 respectively. The Amendment (1992) Regulations provided (regulation 5) that they would "apply only to fees in relation to proceedings concluded on or after" the commencement date of 1 April 2002. This provision was similar to that used to introduce the Principal (1989) Regulations. It was also the style employed to commence the Criminal Legal Aid (Scotland) (Fees) Amendment Regulations 1990 (SI No 1035) and 1991 (SI No 566).

[3]     
After 1992, the Table of Fees remained essentially untouched for some thirteen years. Despite protestations, the rates were not increased, even to keep up with inflation. The descriptions of the work remained unaltered, although there were considerable changes in the practice and procedure of the High Court since they were first formulated in the 1970s. The changes included a substantial increase in the number of formal appearances at trial diets at which uncontested motions for adjournments were made for a variety of reasons. They also included a proliferation in miscellaneous diets allocated to hear sundry applications relating to devolution issues, measures to protect witnesses, commissions to take or to recover evidence and similar matters. There had also been alterations in the mode of preparation for trial, especially in relation to the number of, and time taken for, consultations and the examinations of loci and productions. Furthermore, over some years there had been a demand from the Faculty of Advocates to move to a graduated fees system, which would allow for greater differentiation in daily trial rates, depending upon the nature of the case and the experience of counsel instructed. It was thought that the simple difference between the rates for junior and senior counsel was an inadequate way of assessing a reasonable fee, especially for a junior counsel taking on more or less serious cases on his own or as the leading counsel. .

[4]     
The upshot of all this was that, perhaps even when it was introduced, there was a perception in some quarters that the Table of Fees did not provide an equitable basis for calculating reasonable fees for many pieces of work, notably those specifically provided for. As already observed, in relation to the wording of regulation 10(1), the ability of the Auditor to fix what he considered to be a reasonable fee was limited by the need to calculate "reasonableness" in accordance with the rates in the Table. Where a rate was specified, it could only be increased if there were a particular complexity or circumstance. As a result of the perceived inequities, and presumably having regard to the practical difficulties which then followed, over time it became commonplace for the Scottish Legal Aid Board to allow fees above, and in some cases well above, the rates in the Table. In relation to pieces of work not specified in the Table, the levels which came to be acceptable differed substantially from those included in the Table for near equivalent work. Of particular significance, it became possible for counsel to charge for and to be paid for preparation time, even although the rates in the Table had been intended to be inclusive of that element. As it is succinctly put in the respondents' answers:

"If a payment higher than that specified in the Table of Fees were to be justified by reference to the amount of preparation undertaken by counsel, this might be allowed for by payment of a daily rate higher than the specified rate or by payment of the specified daily rate plus a payment for preparation or by both a higher daily rate plus a separate preparation payment. There was uncertainty as to the fee which would in fact be paid for any particular item of work. There required to be negotiation on a case by case basis. These circumstances delayed the agreement and settlement of counsel's fees...Over time there was significant inflation in the amounts being paid. The system had come to lack transparency and certainty. It was widely recognised that amendment or replacement of the old Schedule was overdue."

[5]     
Negotiations between the Faculty and the Board on a new graduated fee structure had been ongoing for some time. These took on an added impetus in the later months of 2004, when the potential impact of the forthcoming reforms to the procedure of the High Court proposed by Lord Bonomy was coming to be recognised. The reforms would introduce preliminary hearings as a central element, together with a system of fixed and floating trial diets, all intended to stop the so called churning of cases by repeated adjournments. For the reforms to work, it was essential that an appropriate fee structure were put in place. By September 2004, the negotiations had begun to encompass not simply a graduated fee structure but the new reforms. For the Faculty, the negotiations were being conducted by two senior counsel practising primarily in the High Court. Part of their concerns was to achieve, so far as possible, a fixed fee structure for trials, which would create greater certainty in fee charging with a consequent improvement in cash flow. It was the Board's understanding that this was what was desired by counsel generally. Put slightly differently, it came to be accepted that counsel might be prepared to sacrifice, at least to a degree, the high level and type of some fees, which had come to be expected under the existing scheme, for increased certainty of levels and prompt payment.

[6]     
The first full draft of what were to become the Criminal Legal Aid (Scotland)(Fees) Amendment Regulations 2005 (SSI No 113) seems to have emerged at the end of December 2004. The whole Schedule to the principal Regulations was to be replaced with the following:

"1. ...fees shall be calculated by the Board, and in the event of a question
or dispute by the auditor, in accordance with the Table of Fees in this Schedule.

2. Where the Table of Fees does not prescribe a fee for any item of work the Board, or as the case may be the auditor, shall allow such fee for any item as appears appropriate to provide reasonable remuneration for the work with regard to all the circumstances, including the general levels of fees in the Table of Fees.

3. In the taxation of counsel's fees-

...

(d) except on cause shown, fees for only two consultations in the case
shall be allowed;

    1. ...counsel shall not be entitled to fees at an hourly rate in addition to
      the fees prescribed in the Table of Fees; and
    2. correspondence, telephone calls, written work (other than work for
      which fees are prescribed in the Table of Fees) and meetings between counsel acting for the same assisted person are not allowable as separate items and shall be subsumed within the fees set out for the conduct of a hearing.

4. The Board, or as the case may be the auditor, shall have the power to increase any fee prescribed in Part II of the Table of Fees where satisfied that, because of the peculiar complexity or difficulty of the work or any other particular circumstances, such an increase is necessary to provide reasonable remuneration for the work. This power shall only be exercised in the following circumstances and subject to the following conditions:-

(a) the Board, or as the case may be the auditor, shall have regard to the general level of fees in Part II...;

(b) the fees prescribed in Part II...are the fees for a case of average complexity or difficulty...and includes the level of preparation which would not be considered unusual for such a case...

12. A fee for separate preparation shall be allowed only on the following conditions :

    1. such a fee is allowable only once in any case..."

The Regulations continue by specifying in great detail how preparation fees might be calculated.

[7]     
The proposed new Table of Fees, which in due course became part of the Regulations as approved, is a much more detailed and sophisticated document than its predecessor. For example, it deals with the appropriate fee specifically for an early plea of guilty under section 76 of the Criminal Procedure (Scotland) Act 1995 (c 46). It has a graduated system of fees for trial diets, depending on the nature of that trial and whether it is in the High or Sheriff Court. Looking again at the daily rate for a trial in Aberdeen, the method of calculation is altered by providing for identical daily rates for trials throughout Scotland but permitting an additional 100 for travel on a given day. The range for an Aberdeen trial diet is from about 415 to 750 per day, inclusive of travel. A large number of different fees are specified for miscellaneous diets, such as devolution issues, commissions and adjournments. These are no greater, and sometimes much less, than for a day engaged on a trial of the least serious category of cases. The fee for a diet of appeal against conviction is set at 315 per day.

[8]     
The new Table is intended to address some of the shortcomings which existed under the old scheme, where, as noted already, the level of fees had effectively moved far away from the actual figures in the Table. As the respondents put it neatly at the Bar, as a result of inflationary pressures, the scheme "had come adrift from its statutory underpinnings". Latterly, the respondents accepted, it was unusual for the Board to be paying the statutory Table rate for trials at all. Rather, a system had developed whereby counsel would receive that rate upon rendition of his fee note (with a CR33 form). There would then follow negotiations to settle any extra payment claimed. Such a claim and payment became the norm.

[9]     
An initial draft of the Regulations was sent by the respondents to the Scottish Legal Aid Board on 29 December 2004. It contained a simple provision that the new Regulations would come into force on a particular date. However, the respondents queried this with the Board by asking about transitional provisions. According to an Affidavit (Production 7/29) from the Head of Legal Services (Technical) at the Board, this issue had been raised, by the senior counsel conducting the negotiations for the Faculty, at a meeting on 8 December 2004. The Head of Legal Services had replied that the standard clause, that is to say that which had been used in the Principal (1989) and Amendment (1992) Regulations, would be employed. This, as noted above, would apply the Regulations "only in respect of proceedings concluded on or after" a specific date. According to the Affidavit, the two senior counsel expressed satisfaction with that arrangement. However, the discussion on this topic does not appear in any written document produced in Court, either in a Minute of a Meeting or in a communication to or from the Faculty and the Board. Nevertheless, the Affidavit reveals that the Board advised the respondents that the Faculty were in agreement with the commencement arrangements. In particular the comments of the Head of Legal Services were communicated to the office of the solicitor to the respondents by e-mail of 5 January 2005 as follows:

"The transitional arrangements should provide that the regulations shall apply only to fees in relation to proceedings concluded on or after the date when the regulations come into force. Those with whom we were discussing this Table from Faculty were anxious that the provisions should apply sooner rather than later. On the other hand, substituting the Schedule would mean that even cases where we are almost agreed with counsel as to an appropriate fee would all become subject to the new regulations; regulations which are very different from those which have gone before" (Production 7/18).

A further draft of the Regulations was sent to the Board by the respondents on 20 January 2005. This time, it was provided (Production 7/19) that:

"1. These Regulations...shall come into force on 4th April 2005.

2. These Regulations apply only in respect of proceedings concluded on or after 4th April 2005."

[10]     
The next meeting between the Faculty and the Board was on 21 January 2005, this time also including Faculty officials. It is not entirely clear whether the Faculty had been sent a copy of the commencement arrangements but they certainly had a copy of the proposed new Schedule, including the Table of Fees. There was discussion on the rates for appeals, which the Faculty maintained had not been discussed during the negotiations, and on fee levels, but there is no note that the issue of commencement was ever raised. According to one official of the Board, however, this was because it had never been an issue (Production 6/8) and the Board had proceeded on the assumption that the commencement provisions were known to the Faculty. He maintained that he had brought the retrospectivity to the attention of the advocates clerks. By the end of January, the Board seem to have been under the impression that, perhaps leaving aside appeal rates:

"In effect the regulations as far as the Faculty are concerned can now be signed off." (Production 7/22)

A Board minute of a further meeting between the senior counsel acting for the Faculty and the Board, dated 16 February (Production 7/32), records that:

"7...The Faculty indicated that they were not in a position to formally sign off the regulations, as such, given the differences between our respective offices on a number of issues. The Faculty wished to stress that the regulations represented a reasonable compromise and the best form of agreement that was possible. The table of fees now made provision for all the steps in the process and ought to act as a driver for the Bonomy reforms. The Faculty expressed their thanks to the Board for the manner and spirit in which the negotiations had taken place.

SLAB similarly thanked the Faculty for the very reasonable, positive and pragmatic approach that they had adopted during the discussions."

In due course, the Regulations were presented for approval to the respondents. In an Executive Note prepared in that regard (Production 7/31) it was said that:

"The measures incorporated in the Regulations are part of the package of ongoing efficiency reforms that are being introduced in the context of modernisation of legal aid. The modernisation process is based on the three core principles of fair reward for work done, the introduction of quality assurance where it is not in place already and value for money for the tax payer.

...Fee rates have been agreed with the Faculty of Advocates for specific categories of work which provides accuracy in determining fees in relation to cases...

...This promotes efficiency as this allows for an easier calculation of fees due to Counsel and for faster payments.

...The revised fee structure has been estimated to achieve savings at an estimated 1.2 million per year."

The Regulations were approved, but with a revised commencement date of 25 March, albeit that the provision remained that they would apply only to proceedings concluded after 4 April 2005.

[11]     
Two further matters should be noted. First, I did enquire whether the petition ought to be intimated to the Faculty, so that they might make such representations as they wished. However, neither party sought such an order and I was advised that the Faculty were well aware of the existence of the petition. Secondly, the Criminal Legal Aid (Scotland) (Fees) Amendment Regulations 1997 (SI No 719) do not contain the same wording as the earlier Regulations so far as commencement is concerned. Rather, they state:

"3. These Regulations shall apply only to outlays incurred and fees for work done on or after 1st April 1997".

Similar wording is used in the Criminal Legal Aid (Scotland)(Fees) Amendment Regulations 2004 (SI No 264), which came into force on 28 June 2004. The Board's contention that historically the Regulations had always operated on the basis of cases concluded (Production 6/8) does not appear to be entirely accurate.

2. The Problem and Submissions

[12]     
The petitioner is a member of the Faculty of Advocates and practises primarily in the criminal courts. The difficulty, which has now arisen, stems from the decision by the Scottish Legal Aid Board to apply the new Regulations to all fees where the proceedings have been concluded on or after 4 April 2005. The effect of this is that, where a case has concluded after that date, all the work done by counsel prior to the commencement date is paid on the basis of the new Schedule coming into force after that work has been done. In some cases, the work may have been completed months before the Schedule came into force. The petitioner complains that, in certain cases, she will receive considerably less under the new Schedule than she would have done under the old scheme, albeit that she undertook the work on the basis of the applicability of that scheme.

[13]     
Primarily for illustrative purposes, the petitioner produced a draft fee note (Production 6/9) for an actual case, conducted at Sheriff and Jury level in Peterhead, which concluded with an adjourned sentencing diet on 12 April 2005. This produces some interesting comparisons. No less than seven consultations are charged for, some lasting for more than four hours. It is maintained that all of these would have been allowable under the old scheme. However, under the new Schedule, the petitioner maintains that she will only be paid 86 each for five of them (conducted with senior) and a further 307 for consulting with her agent whilst perusing productions for two and a half hours. Five notes were prepared by the petitioner in the early stages of the case. She maintains that she would have been paid 125 each for four of these notes under the old scheme but only 50 each under the new Schedule. For a first diet, she states that she would have received in excess of 1,172 under the old scheme but only 575 under the new Schedule. For the hearing on an application for a Commission and Diligence, some 600 would have been allowed as against 288. Finally, for two trial diets, with senior counsel, one of which seems to have involved a plea in mitigation, fees of in excess of 742 per diet would have been allowable as against 460 and 280 per day under the new Schedule. All of this is exclusive of preparation. It produces totals of about 3,000 under the new Schedule as against in excess of 5,500 under the old scheme. Under the head of preparation, the petitioner claims that the new Schedule would permit only 720 whereas under the old scheme she would have been paid in excess of 3,100. Although the respondents do not accept, perhaps not surprisingly, that the figures postulated as allowable under the old scheme are accurate, it was not in serious dispute that the petitioner would have obtained substantially more under the old scheme than she will if the new Schedule is held applicable. Indeed, the respondents accepted that they would have been prepared to offer up to 4,000 in respect of the fees rendered under the old scheme. Meantime, however, the petitioner would have obtained only an immediate 1,400 under the old scheme as modified in practice by the form CR 33 system. She would have had to wait for the conclusion of negotiations with the Board before being paid any balance.

[14]     
Since the new Schedule is designed to deal with the previous shortcomings and put fees onto a more equitable footing, it is clear that, in some cases, counsel will be better paid, perhaps much better paid, than under the old scheme. The most obvious example of this is the enhanced fee for a plea of guilty under section 76 of the 1995 Act (supra). On the other hand, it is also certain that, in some cases, the new fees payable will be lower, perhaps substantially lower, than under the old scheme, even looking at the strict terms of the old Table rather than the developments in fee levels thereafter. Looking at the category of cases starting before the commencement date but finishing afterwards, it may be that, were counsel as a whole to be paid under the new Schedule, the global amount of fees paid out may be higher, or at least at the same level, as under the old scheme. There is certainly no statistic to demonstrate otherwise at present. Equally, when looking at individual counsel, some may find themselves better off being paid for such cases under the new Schedule when their practices are looked at as a whole. However, given the "swings and roundabouts" nature of the new Schedule, it must be that certain cases will be paid at a lower level under that Schedule than under the old scheme. Especially in cases where a material amount of the work done is not covered by the descriptions of work in the old Table, there will be cases where the fees payable under the new Table will be substantially lower than before.

[15]     
In these circumstances, the petitioner seeks a declarator that the new Regulations are ultra vires the respondents given that section 57(2) of the Scotland Act 1998 (c 46) prohibits the respondents from making any subordinate legislation which is incompatible with the rights and fundamental freedoms set out, inter alia, in the first article of the First Protocol to the European Convention on Human Rights. That article provides :

"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived on his possessions except in the public interest and subject to the conditions provided for by law...

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."

The petitioner also seeks reduction of the Regulations.

[16]     
The petitioner maintained that section 33(1) of the 1986 Act, read in conjunction with section 4(1), afforded her a statutory right to payment of her fees, albeit in terms of any regulations made under the Act. She had no other means of securing payment, given the terms of section 32. The right to payment arose when the particular piece of work was carried out. However, the effect of the commencement provisions of the new Regulations is to deprive the petitioner of her right to be paid a fee, in respect of work done before April 2005, calculated in accordance with the regulations existing at the time of the work. Instead, the new Schedule entitles her, perhaps by way of compensation, to payment of a fee calculated in a different manner. In so far as that Schedule provides for a materially lower fee, there is a deprivation of property in terms of the first article of the Protocol. In that regard, fees earned amount to a "possession" (see the summary in Clayton & Tomlinson: The Law of Human Rights, para 18.34; Ambruosi v Italy, 19 October 2000, European Court of Human Rights no. 31227/96, paras 21-24, 27). Where work has been carried out, the right to payment out of the Fund is a possession, even if the value of the fee has yet to be ascertained. Since deprivation is shown, it is for the respondents to demonstrate that this action, and the compensation offered, is adequate and strikes a fair balance between the interests of the petitioner and the state (Sporrong and Lönnroth v Sweden (1982) 5 EHRR 85, para 69; Ambruosi v Italy (supra) para 31). Looking at the respondents' contentions in their answers, the only justification offered appears to be administrative convenience; that is to say, increased certainty of amount and ease of payment. Whatever the laudable aspects of the new Schedule may be, there is no attempt by the respondents to suggest that its retrospective nature does achieve a fair balance between the petitioner's right to her fees and the general interests of the community at large. The right to compensation is clear (Lithgow v United Kingdom (1986) 8 EHRR 329, para 120). There were three questions. First, is the retrospective application of the new Schedule lawful in so far as it results in the deprivation of the petitioner's property? Standing the terms of the 1986 Act, the answer to that question is in the negative. Secondly, is it in the public interest that the new Schedule should have retrospective application? The only interest appears to be the saving of money. Thirdly, does the retrospective application of the new Schedule strike a fair balance? There may be a margin of appreciation generally in that regard, but how can depriving someone of, say, a fee of 1,000 be adequately compensated by a payment of 500? The Answers do not allege that there was material overpayment under the old scheme which required retrospective correction. All that is said to justify the retrospectivity is that: (i) the Faculty representatives were aware of the potential mode of application; (ii) this was the usual way of commencing the effect of such regulations; (iii) some fees will be higher under the new Schedule; (iv) it will produce greater certainty and speed; and, finally, (under reference to National and Provincial Building Society v United Kingdom (1997) 25 EHRR 127) restrospectivity is not per se a breach of the first article. None of this reasoning stands up to scrutiny. The petitioner opposed any suspension of the effect of any potential decision of the Court to allow the respondents to correct the defect in the Regulations, unless and until the respondents could explain when, how and with what effect any correction would operate.

[17]      The respondents' motion was for the petition to be dismissed. As a preliminary observation, it was not being said that the petitioner would not be paid for any work which she had carried out. Nor was it being said that the petitioner would not receive reasonable remuneration for the work done. It was true that, in some cases, counsel would receive less under the new Schedule but there were situations where the reverse would be true. It was too narrow an approach to look at the figures in isolation. The new Schedule also attempted to achieve greater clarity and certainty, and better cash flow for counsel, than before. These were not irrelevant as aims. The respondents had been entitled to take into account that a draft of the new Regulations had been available in January 2005 and it could have come as no surprise to counsel that change to the fee regime was in the offing. Under the Principal (1989) Regulations, counsel were allowed such fee as appeared to the Auditor to be reasonable, calculated in accordance with the Schedule. The terms of the Schedule created uncertainty, especially where no fee was mentioned in the Table or where counsel charged for exceptional preparation (see The Scottish Legal Aid Board Applicants 1999 SC 670; and, in the civil context, Geddes v Lothian Health Board, unreported, Lord Prosser, 17 February 1993). It was accepted that there would be cases where the old schemes would have produced greater payments, but there would be other cases where the reverse was so. Under the old scheme, there may have been a statutory right to payment but the amount of the fee was only fixed when the auditor determined what was reasonable. Under the new scheme, the arrangements for payment involved greater certainty and the cash flow of counsel would be improved. For the petitioner to succeed in maintaining that a fair balance had not been struck, she had to say that overall, taking into account her whole position, she was prejudiced. She had not done so. The advantages of being paid a certain amount immediately required to be compared with the old system of uncertainty and delay. The existence of a retrospective element in Regulations did not render it contrary to the first article (see Stevens and Knight v United Kingdom, European Commission of Human Rights, 9 September 1998, no 28918/95). In determining whether a fair balance had been achieved, the aims of the legislation should be looked at as should the Faculty's rôle in their development. A wide discretion was permissible to national authorities in this area (R v DPP ex parte Kebiline [2000] 2 AC 326, Lord Hope of Craighead at 380) especially as public funds were involved (R v Secretary of State ex parte Spath Holme [2001] 2 AC 349, Lord Bingham of Cornhill at 395). In looking at fair balance, certain factors were relevant : (i) it was not disputed that the new Schedule promoted certainty, clarity and speed of payment; (ii) it was not suggested that the payments under the new Schedule were not reasonable remuneration for the work done; (iii) it was appropriate that the new Schedule should to apply to the whole proceedings of a case and not just to a part; (iv) there were uncertainties under the old scheme about what figure, above that in the Table, counsel would be entitled to. The early recovery of fees was something welcomed by the Faculty; and (v) it was plain that the old scheme was long overdue for replacement and that new regulations were necessary to cover the Bonomy reforms. There had been no deprivation of property (cf Ambruosi v Italy (supra)) although there may have been an interference with the possession of the fee (Draon v France, European Court of Human Rights, 6 October 2005 no 1513/03). However, that interference had been predictable and not, per se, a breach of the article (see Draon v France (supra) para 81). It could not be said here that the payments to be made under the new Scheme were inadequate (cf Draon v France (supra) para 83). What was involved was the replacement of a scheme containing uncertainty with one of clarity and involving, in some cases, increased fees. In looking at whether a fair balance had been struck, it was necessary to look beyond the individual fee note to the situation as a whole. In short, it could not be said that the application of the provisions to past work failed to strike that balance.

[18]      If the Court were against the respondents, then two further matters required consideration. First, there was the question of whether the commencement provisions of the Regulations could be construed in a manner which was compatible with the first article (see Ghaidan v Godin-Mendoza [2004] UKHL 30; 2 AC 557). This might be possible by construing regulation 1 as meaning that the new Regulations applied only to work carried out after 25 March 2005 but that regulation 2 restricted that generality to cases which were concluded after 4 April 2005. However, given the method of treatment of accounts to date under the new Regulations, that might cause practical difficulties. Secondly, there was the possibility of utilising section 102 of the Scotland Act (supra) by suspending the effect of any order, which the Court might pronounce, to allow the respondents to cure any defect in the Regulations. The content of the Regulations was not challenged, it was simply its retrospective effect. It would be disproportionate to strike down the Regulations as a whole. The respondents were not in a position to provide details of any possible amendment at present, but there were a number of amendments to the Regulations in contemplation. The case might usefully be put out for a By-Order hearing so that detailed consideration could be given to the timescale and nature of any amendment.

3. Decision

[19]      The first article of the Protocol refers to peaceful enjoyment of "possessions", but this has been explained as meaning, or at least including, a right to enjoy property (Sporrong and Lönroth v Sweden (supra), para 57 quoting from Marckx v Belgium (1979) 2 EHRR 350, para 63). Future income falls within the definition of "possessions" if that income has been earned or where an enforceable claim to it exists (Ambruosi v Italy (supra), para 20). When counsel performs work for a legally assisted person, he has a statutory entitlement to payment (Legal Aid (Scotland) Act (supra) section 33(1)). That entitlement exists as soon as the work has been performed. The entitlement was, until the coming into force of the new Regulations, to be paid reasonable remuneration, calculated in accordance with the Schedule then attached to the Criminal Legal Aid (Scotland)(Fees) Regulations 1989 (supra, as up-dated in 1992). The precise amount of a fee for a particular piece of work might ultimately have required assessment by the Auditor. However, in practice, that was very rare indeed and the phraseology of the relevant regulation (regulation 10, which remains in force in a slightly modified form) cannot be read as meaning that counsel's entitlement only arose as and when the Auditor made a determination. Unless there was a challenge that the work had not been done at all or that its performance had been unreasonable (which is not the case here), the Auditor's task is to determine, when called upon to do so, the appropriate level of fee and not, as a generality, the entitlement to a fee. As at the various times when the petitioner completed a piece of work for a legally assisted person, she had earned her fee and had an enforceable claim to it. That claim fell to be determined under the Schedule in force when the work was carried out. Immediately prior to conducting the work and during its execution, the petitioner would have expected her fee to be calculated under the Schedule then existing. Leaving aside considerations of the "cab-rank rule", her acceptance of instructions to do the work, indeed to carry out any work for assisted persons, may have been based upon that expectation. In all these circumstances, the fees for work carried out prior to the coming into force of the new Schedule do constitute "possessions" for the purposes of the first article (see similarly the conclusion in Ambruosi v Italy (supra) para 24).

[20]     
Having established the fees as possessions, and thus engaged the first article, the next task is to determine whether a breach of the article has been made out. In interpreting the effect of the first article, the European Court of Human Rights has explained (in Sporrong and Lönnroth v Sweden (supra at para 61)) that:

"That Article comprises three distinct rules. The first rule, which is of a general nature, enounces the principle of peaceful enjoyment of property; it is set out in the first sentence of the first paragraph. The second rule covers deprivation of possessions and subjects it to certain conditions; it appears in the second sentence of the same paragraph. The third rule recognises that the States are entitled amongst other things, to control the use of property in accordance with the general interest, by enforcing such laws as they deem necessary for the purpose; it is contained in the second paragraph.

The Court must determine, before considering whether the first rule was complied with, whether the last two are applicable."

Although there may be distinct rules, ultimately the overall question may return to whether, even if the second and third rules are not applicable, the first has been breached.

[21]     
The effect of bringing the new Schedule into force in a manner which affected the fees for work already done did not, at least in the circumstances described in this case, deprive the petitioner of her property (i.e. her right to claim a fee for the work done). The new Schedule does impact upon the value of these fees. In some of the situations illustrated, that impact is a negative and substantial one, but it does not expropriate the petitioner's claim. The second rule is not therefore applicable. The retrospective effect of the new Schedule - that is to say its application to work completed before its commencement - cannot be seen as a control upon the petitioner's claim. It is simply a replacement of the method of calculating quantum of the claim. In this regard the petitioner does not specifically rely on a breach of the third rule in the petition. Furthermore, she does not contend that any such control is not permissible as a generality in the public interest, albeit that she has certain trenchant comments on the scope of that interest. On the other hand, it is difficult to perceive the respondents' actions regarding the petitioner's claim to fees already earned as anything other than an interference by the State in the petitioner's enjoyment of her property in terms of the first rule. It is such an interference. That being so, the main issue remaining is whether that interference complies with the cardinal principle of European jurisprudence that the measures taken by a State in interfering with an individual's property are proportionate; that is to say that they strike a fair balance between the competing State and individual interests (Sporrong and Lönroth v Sweden (supra), para 69).

[22]     
There is little doubt that the introduction of the new Schedule is an attempt to cure the defects which existed under the old scheme. In the context of the criminal justice system, the extent of the difficulties, which were prompted by the deficiencies of the Schedule and the failure to up-date it, should not be underestimated. First, as outlined above, the descriptions of work were inadequate. Secondly, the phraseology of regulation 10 was problematic because of the juxtaposition of an obligation on the Auditor (and hence the Board and counsel) to calculate reasonable remuneration for work done yet at the same time to do so in accordance with a Table containing rates which were perceived as increasingly unreasonable. These general difficulties caused practical problems in a growing number of cases because of counsel charging what was regarded as reasonable in a general sense but which was well out of line with the general level of fees in the 1992 amended Table. Uncertainty and delay followed.

[23]     
The development of a new detailed Table of Fees by the Scottish Legal Aid Board and the Faculty of Advocates, which covers most, if not all, aspects of modern criminal practice and applies reasonable rates to them, must be seen as in the public and general interest. The attempt to define what work should be regarded as reasonable in the ordinary case, and to restrict fees accordingly, is a laudable objective in that regard. The sacrifice of certain levels of fees for particular aspects of work in return for certainty and prompt payment cannot be criticised as anything other than a reasonable compromise from the points of view of both bodies. Equally, the efforts to explain in a Schedule just when and how preparation should be allowed may result in that area being much more understandable. In short, especially with the wide margin of appreciation given to States to regulate social policy and the expenditure of public money, the introduction of the new Schedule is unobjectionable even if it might, in some cases, result in a diminution of fees earned in the future. Whether that diminution will occur as an overall statistic, of course, remains to be seen, albeit that there may be savings in administration.

[24]     
The question is, however, not whether the introduction of the Regulations is in the general or public interest but whether a retrospective implementation of the new Schedule can be justified as a proportionate fair balance. Although, in certain situations, retrospective civil regulation may be justified to cure social wrongs or imbalances, it may be seen as somewhat peculiar for a State to argue such justification where the pre-existing ills have been created under the auspices of prior State regulation. The property, which the petitioner and other counsel had in their fees prior to the coming into force of the new Schedule, was governed primarily by the Schedule to the Principal (1989) Regulations, as amended in 1992. Counsel were conducting cases in the expectation of the Board paying them on the basis of the practice and procedures which had been developed relative to the Schedule then current. The manner in which that Schedule came to be applied generated a fee structure which is reflected in the type and level of charging which the petitioner vividly illustrated for her appearances in Peterhead. It may be that, looked at objectively and in isolation, some of the items charged for and the levels of fee permitted might be regarded as more or less reasonable than the fees allowable in the future under the new Schedule. But it is not possible to compare the two different systems to see whether the one or the other is the more reasonable. The reality is that they represent two quite different statutory regimes for determining the reasonableness of fees. The system of fee regulation, as governed still by regulation 10 of the Principal (1989) Regulations, does not permit the payment of a "reasonable fee" as such but one deemed reasonable when calculated in accordance with a Schedule of rules, notably the rates specified in the Table of Fees. It is not that the fees under the old scheme were not reasonable and those under the new Schedule are, or vice versa. They may both be seen as ultimately "reasonable", when looked at overall or in the context of a given type of case. However, that reasonableness is approached in each case by a radically different route, which can lead to quite different fees being payable as being "reasonable" in a single case depending upon which regime is applicable. Indeed, the terms of the Schedule can have an influential part in guiding counsel towards what may or may not be a reasonable approach to the preparation for and conduct of criminal cases. In concluded cases, the existence of a current schedule may have determined, to some extent, what counsel felt was permissible in that regard.

[25]     
The first justification put forward for the retrospective application of the new Schedule - that is to say its application to completed work - does appear to be, as the petitioner put it, primarily administrative convenience. That convenience is essentially that all fees in a given case should be determined under the same regulatory regime. Although that may be convenient, it hardly provides a warrant for the compulsory application of an entirely new Schedule, radically different to its predecessor, to old work. Any new Schedule might equally have been made applicable only to cases started after the date of commencement of the Regulations. Furthermore, the terms of the 1997 and 2004 Amendment Regulations suggest that there is little real difficulty in assessing fees on two different bases over two different time periods.

[26]     
Secondly, it is said that the mode of implementation is justified because it will give greater certainty and speed of payment for past pieces of work as it will for future steps. Although that might provide a benefit to some counsel in some cases, it does not take the respondents very far in explaining what advantage is thereby created to the public interest in the retrospective application of the Schedule, other than a marginal degree of administrative improvement in the assessment of the relatively small number of fees generated prior to the commencement date where the case has been concluded thereafter. Having regard to the fact that counsel will have carried out work in the expectation of being paid under the State's own regulatory scheme in existence at the time of the work being executed, it is not possible to discern any significant public advantage or interest in applying the new Schedule retrospectively.

[27]     
There are a two other aspects of the case which require to be mentioned. The first is the progress of the negotiations on the new Schedule between the Scottish Legal Aid Board and the Faculty of Advocates, of which the petitioner is, after all, a member. The fact that the negotiations between these two bodies have culminated in the introduction of a new Schedule, the introduction of which has provoked an almost immediate public litigation, may be seen by some as a matter of some regret. The Faculty's views on the progress of these negotiations and the timing of the introduction of the Schedule have not been revealed to the Court. Suffice it to say, it is not contended that the Faculty entered into an agreement about the introduction of the Schedule which had the effect of binding itself or its members. However, it is submitted that the part played by the Faculty in the negotiations is a relevant factor in assessing whether the correct balance has been struck. As a proposition, that must be correct. Had there been evidence that the Faculty had approved of the commencement provisions following upon that matter being put to its members, it would at least have been more difficult to reject the contention that a fair balance had been struck. In that situation the balance being attacked would have been approved by the body incorporating those affected. However, that does not seem to have been the case. All that can be said is that, according to the Board, the two senior counsel, who had been representing the Faculty, were made aware of the proposed commencement provisions and seemed content with them. Ultimately, it seems clear that no formal approval of the Faculty was ever given to those, or any other, provisions despite the friendly acknowledgements at the end of the negotiations.

[28]     
Secondly, there is the contention that, although the State did interfere with the possession of the fees under the old scheme, counsel are still to be paid reasonable fees for work done under the new Schedule. Although this is an important aspect to be taken into account in assessing balance, it is incorrect to categorise the new fees as compensation for loss of the old amounts. The new fees might conceivably amount to roughly the same as the old in certain cases looked at as a whole. A particular counsel might, over a year, derive the same financial benefit from the new Schedule as from the old scheme. However, as already observed, the format of the new Schedule is radically different to the old. There is, for good reasons, little attempt to equate fees as between the new and old systems. In that way, therefore, the new fees cannot be taken as compensating for the loss of the old. Furthermore, it is doubtful whether it is possible to take much cognisance of the "swings and roundabouts" argument, whereby an individual piece of work should not be looked at in isolation. The right under the Convention is to have peaceful enjoyment of possessions. If there is interference with one possession, the right is infringed and that can hardly be cured by enhancing another unrelated possession which chances to belong to the same person or by enhancing one belonging to a colleague.

[29]     
For all of these reasons, the retrospective application of the new Schedule infringes the petitioner's rights under the first article to peaceful enjoyment of the fees which she earned before the commencement date. A fair balance has not been struck. I am therefore inclined to sustain the petitioner's first and second pleas-in-law, to repel the respondents' first and third pleas-in-law and to grant the orders craved on the basis that the approval of the new Regulations was ultra vires the respondents as regards the applicability of the new Schedule to work done prior to the commencement date. However, I will accede to the respondents' motion to put the case out By-Order to determine the next procedural step, including whether section 102 of the Scotland Act (supra) should be invoked. As the respondents have said, it is only retrospectivity that is in issue. Furthermore, there may be many counsel who are more than content to proceed under the new Regulations and to accept that retrospectivity. If an option to proceed under the new or old Schedules were available in the limited number of cases to which the current problem applies, then the difficulties might be cured. However, there are other ways of proceeding, no doubt some of which might be substantially disadvantageous to counsel. It is for the respondents to determine how they wish to proceed. I will allow a period for that to be determined by putting the case out By-Order in three weeks time.

[30]     
I should add finally that, had I not been of the view that the article had been breached, I may have been forced into the conclusion that the commencement provisions of the new Regulations required to be construed, as submitted by the respondents, as meaning that they applied simply to new work and then only to cases concluded after 4 April 2005. However, that conclusion is one which was not attractive to either party.


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