PROVING THINGS 118: IT SEEMS THAT EVEN THE LORD CHANCELLOR DOESN’T KNOW HOW TO PROVE THINGS: “THAT FINAL SENTENCE WAS BOTH INACCURATE AND MISLEADING”

A body charged with the delivery of legal services to some of the most vulnerable people in our society (and which, incidentally, is in charge of the justice system) should  be making decisions that are logical and justifiable – you would think.  Not to mention making decisions that are lawful.   Read the judgment of Mrs Justice Andrews DBE in  Law Centres Federation Limited (t/a Law Centres Network), R (On the Application Of) v The Lord Chancellor [2018] EWHC 1588. Logic and commonsense (and even basic legality) in decision making appears to be in very short supply.

 

“No attempt was made in this case to work out the actual figures, let alone to carry out any form of financial modelling before the decisions under challenge were taken. That did not need to be an expensive or sophisticated exercise involving outside consultants. Even the kind of exercise belatedly carried out by Ms Jordan might have been informative.”

THE CASE

The Law Centres Federation were bringing an action seeking judicial review of the Lord Chancellor’s decision to enlarge the geographical areas for those who tender to provide legal services for the Housing Possession Court.

THE LAW CENTRES’ ARGUMENT

The judgment summarises the claimant’s argument.

The Claimant contends that the decisions are unlawful because the Defendant failed to properly acquaint himself with the legally necessary information on which they should have been based, and instead proceeded on the basis of an assumption, for which there was no evidence, that the introduction of larger contracts would improve “sustainability”. The Claimant’s case in a nutshell is that the Defendant failed to make sufficient enquiries, leading in each case to a decision that was both illogical and irrational. Further or alternatively, it is contended that the Defendant failed to comply with the public sector equality duty (“PSED”) in section 149 of the Equality Act 2010.

MISLEADING STATEMENTS AND NON-EXISTENT IMPACT ASSESSMENTS

The judge reviewed the decision making process

    1. The central justification given to Ministers for the proposed changes namely, that small schemes were already proving to be unsustainable and that providers were pulling out because they were not earning enough money from the HPCD work, was not evidence-based. It was based on assumption or conjecture or, at most, “anecdotal” evidence from a handful of un-named providers, and which was not reflected in the 2016 table recording the reasons for provider withdrawals.
    2. On 3 November 2016, a submission was made by the LAA to the Minister of State (then Sir Oliver Heald QC MP) seeking clearance to carry out a consultation on the proposal to consolidate the number of HPCD schemes and introduce price as a criterion in the competitive tendering process. The Ministerial submission included this passage under the heading “Background”:
You asked the LAA to obtain initial views from the profession on the proposals on HPCDS. The LAA met with the Law Society and the Legal Aid Practitioners Group on 2 November to discuss the HPCDS proposals on a confidential basis. They accepted the case for more sustainable schemes, and agreed with the outline principle of fewer, larger schemes” [Emphasis added].
    1. Regrettably, that final sentence was both inaccurate and misleading. The true position was that the 2 November meeting was a private briefing about the LAA’s intentions, rather than a meeting to canvass views about the merits of the proposition that larger schemes would be more financially viable. Whatever the Minister might have wished, the views of the two named professional bodies (and those of their constituents) on “the case for more sustainable schemes” were not sought, let alone obtained, and there most certainly was no agreement, in principle or otherwise, with the “outline principle”. Indeed, because the meeting was confidential, the representatives of the Law Society and Legal Aid Practitioners’ Group (“LAPG”) who attended it were unable to discuss what had been said with their members, and therefore they were in no position to express a view about the proposals.
    2. The most that could be truthfully said about the outcome of the meeting was that the representatives of the Law Society and LAPG voiced no objections to the LAA’s proposals, apart from suggesting that their constituents were unlikely to accept the idea of price-competitive tendering. However, since their role was just to take note of the information that they were being given, that is hardly surprising. Far from endorsing what the LAA was proposing, as the Minister was led to believe, both professional groups were strongly opposed to it, as the responses to the consultation ultimately demonstrated.
    3. Unfortunately, this is not the only misleading passage in the first Ministerial Submission:
Paragraph 10 stated that “there is a measure of agreement that moving delivery of HPCDS services through fewer larger contracts is needed to ensure sustainability” [emphasis added]. This suggested there was a problem with sustainability and that the proposed change was a necessary response to it. However, there was no such agreement, there was no known problem in respect of sustainability (on the LAA’s own case fewer than 10% of the providers had “anecdotally” withdrawn from a scheme for lack of financial viability, and all had been replaced), and the “need” to move to fewer larger contracts to ensure future sustainability had not been demonstrated by evidence.
Paragraph 13 stated that “available data indicates many of the schemes have only small volumes of work and these are unlikely to be commercially viable for providers. This is leading to a lack of sustainability of these services which has been evident in the ongoing incidence of providers pulling out of contracts“. [emphasis added] Other than the fact that many of the schemes had small volumes of work, there was no, or no proper, evidential foundation for those statements.
Paragraph 14 expressly acknowledged that continuity of service had been maintained to date, but “the LAA are of the view (and professional groups provisionally agree) that the better course is to take the opportunity to consolidate provision into fewer, larger, contracts serving a wider geographic area. Moving to larger contracts we hope will provide for greater sustainability, increased efficiencies in the delivery of services, greater economies of scale and better value for the tax payer”. No explanation was given for why it was felt that larger contracts would provide for greater sustainability. The statement that professional groups provisionally agreed was untrue. The person who drafted it had translated the absence of articulated opposition into positive support.
  1. The Defendant relied on evidence from, among other civil servants, Mr Thomas Bainbridge, the Head of Civil Legal Aid Policy within the MoJ, who was responsible for drafting the consultation document. Mr Bainbridge began the drafting process in September 2016. He says that for this purpose he was provided with documents setting out the policy discussions in 2015 around the proposed approach for tendering HPCDS contracts, and details of the proposed scheme areas. He states that he was “aware of the rationale for larger areas and the data which indicated that many of the schemes have only small volumes of work and these are unlikely to be economically viable for providers“. The data certainly indicated that many schemes had small volumes of work, but it said nothing at all about whether and if so how this impacted on the ability of the service provider to maintain the service to the clients at court. The lack of economic viability was an assumption.
  2. Mr Bainbridge said in his witness statement that a key rationale for tendering larger schemes was better to mitigate against the impact on individual HPCD scheme contracts of future court closures. As he put it, “moving to a procurement area approach, whereby all courts within a specific geographical boundary must be covered by a single contractual provider, means that should work move from one court to another, the impact on the contract may not be as great and that more stable service provision would be maintained providing a better service to [HPCD scheme] clients.
  3. I find that reasoning difficult to follow, given the way in which the providers and the LAA dealt with the impact of such changes under the existing contracts, as described in paragraph 23 above. Mr Bainbridge does not explain how in practical terms it was thought that more stable service provision would be maintained in such circumstances by having one provider covering a much larger area, with the assistance of local agents where necessary. Problems would only arise under the existing system if the court to which the work was transferred was not already covered by a HPCD scheme contract, and only then if the provider (or agent) who had provided the services at the court which was closed was unwilling or unable to provide the services at the new one. There was no evidence that this had ever happened.
  4. Having a single named provider for a contract covering the wider geographical area might possibly reduce or even eliminate amendments to the HPCD scheme contract if one or more courts within that area ceased to hear possession lists, but it would be unlikely to make a difference to the provision of the services in question. Under the existing schemes there should have been sufficient forewarning to make any necessary contractual and practical amendments before the changes were implemented. If, under the new scheme, two agents, or the provider and one agent, were already providing the services at the two courts concerned, there would still be a need for resolution of whether and how the work would be divided up between them when one court ceased hearing possession lists. On the other hand, if no-one was prepared to cover the court now hearing the possession lists, the problem would be exactly the same as it would be if that situation arose under the existing scheme, save that in the first instance, at least, it would be for the provider rather than the LAA to try and find a solution. Any costs savings to the LAA from the changes were acknowledged internally to be “negligible”.
  5. The policy consultation was published on 20 January 2017 and closed on 16 March 2017. A deliberate decision was taken not to carry out an Equality Impact Assessment (“EIA”) prior to the consultation. Mr Bainbridge said that the LAA did not believe that there was an impact on those who access the HPCD schemes insofar as the location of the service was concerned because that was determined by HMCTS, and the client would have to travel to the same court irrespective of whether scheme areas were consolidated or tendered for separately. That is a fair point, but the potentially adverse impact on clients with protected characteristics of making scheme areas much larger was not confined to their having to travel longer distances for the initial court hearing. Mr Bainbridge is silent on the question whether any other potentially adverse impacts on people with protected characteristics were even considered before the consultation; one purpose of an EIA is to find out if they exist.
  6. Confusingly, the consultation document erroneously referred to an “Impact Assessment” as having been carried out. Mr Bainbridge helpfully explained that this is a reference to a different type of document from an EIA, which is used for different governmental purposes. An Impact Assessment is used to assess the impact of non- legislative policy changes in accordance with a methodology set out by HM Treasury. In broad terms it sets out the rationale for Government intervention, the policy objectives and intended effects, and the relevant costs, benefits and risks. It is not compulsory to publish an Impact Assessment for policy changes such as this one, though it was originally intended to do so.
  7. Mr Bainbridge explained how the error in the consultation document came about. The document was drafted using the MoJ’s consultation template, and at the time of drafting, he was expecting that they would also draft an Impact Assessment to publish alongside the consultation. However, the Impact Assessment had to be put on hold because the tender model had not been developed and without it, such an assessment could not be made. By an oversight, the reference to the Impact Assessment (and what it was anticipated it would say) remained in the consultation document.
  8. The consultation document stated that the Impact Assessment “indicates that those seeking advice and assistance for a Housing Possession Court Duty matter are not likely to be particularly affected. The proposals are unlikely to lead to significant additional costs or savings for businesses, charities or the voluntary sector“. The first statement is only true if consideration of the effect of the proposals on users of the schemes is confined to the continued availability of emergency legal advice and representation at court. Users will continue to be provided with those services – but they were not lacking in such provision under the existing scheme contracts. As to the magnitude of the additional costs to the NfP sector, including the cost impact of providers who were previously contracting directly with the LAA becoming agents, no study had been carried out to assess it. Therefore, the LAA was in no position to express an informed view as to its significance or lack of significance.
  9. Paragraph 15 of the consultation document said that “it would appear that the volume of work within some schemes is not commercially viable“, and that since 2013 it had been necessary for “13 schemes to be retendered in some way” which, according to paragraph 16, had “resulted in an administrative burden for both providers and the LAA”. The implication was that the administrative burden would be improved by making the size of contract areas larger, whereas in fact the LAA proposed to get over the problem of provider withdrawals by including a provision expressly prohibiting providers from withdrawing from the contract.
  10. In paragraph 22 it was stated that around half the current schemes had “very low volumes of work, presenting low economic viability and attractiveness for providers“. Thus, the assumption that small schemes were economically unsustainable was again presented as an established fact. It was suggested that the proposal to decrease the number of contracts would “provide for increased efficiencies in the delivery of services, greater economies of scale and better value for the tax payer”.
  11. Even though the erroneous reference to the non-existent Impact Assessment suggested that users of the HPCD schemes were “not likely to be particularly affected”, the consultation document sought the views of consultees on what impacts the proposals might have on individuals with protected characteristics under the Equality Act. Whilst there is nothing wrong in principle with making such inquiries of consultees, they are not to be treated as a substitute for the decision-maker’s own investigations and considerations of such likely impacts.
  1. The LAA carried out no calculations of the financial value of the HPCD scheme contracts to the providers until after the hearing of the claim for judicial review, when I was belatedly provided with a witness statement from Ms Gemma Jordan, a commissioning manager within the LAA, supplying figures for the value of the schemes in Ms Beedell’s table in the year of withdrawal and (where applicable) the previous year. Ms Jordan’s evidence showed that in some cases the scheme value in the financial year before the provider withdrew was more than in the year in which the provider withdrew, whereas in other cases, such as Aylesbury/High Wycombe, and Cambridge, the value to the provider had significantly increased in the year of withdrawal. There is no obvious pattern. If that exercise had been carried out before the policy was formulated, it might have given some pause for thought about whether it was right to leap to the conclusion that those providers who gave no reason for withdrawal did so for financial reasons.
  1. There is no evidence that the LAA ever considered what percentage of the income from Legal Aid work given to the provider who withdrew, the HPCD scheme income represented. Ms Scolding submitted that it is reasonable to infer that where the income from the scheme was less than £10,000 it was unlikely to be sustainable given the overheads incurred in running an office and paying staff, but the legitimacy of that inference depends on numerous factors, including other income being generated by the provider, none of which was investigated. As Mr Coppel pointed out, nobody would open an office just to carry out HPCD schemes. Ms Scolding also submitted that the fact that providers were giving up fairly quickly was an indication that schemes were insufficiently lucrative – but there is no evidence from any of the civil servants involved that they drew that inference from the timing of withdrawals.
  2. Whilst the conclusions that small schemes were not financially viable and larger schemes were likely to be more economically viable for providers are ones that might be reached by a rational decision-maker, following a proper evidence-based inquiry, they are not so obvious that they can be assumed to be right without making any investigation of the financial impact of the proposed changes, which is what the Defendant did. As the Claimant (and other consultees) pointed out, larger schemes are likely to cost more to staff and administer; and if agents were used as a means of mitigating the cost to a provider of long-distance travel which would not be reimbursed, the additional fee income for the provider from the larger volume of work, which was supposed to defray the additional costs or make the contracts more attractive, will not be received by him. Indeed, as I have already explained, the introduction or retention of agents undermines the rationale for the change, as they deprive the new provider of most of the extra fee income which is the supposed incentive for taking on the larger contract.
  3. No attempt was made in this case to work out the actual figures, let alone to carry out any form of financial modelling before the decisions under challenge were taken. That did not need to be an expensive or sophisticated exercise involving outside consultants. Even the kind of exercise belatedly carried out by Ms Jordan might have been informative.
  4. I am therefore driven to the conclusion that this decision was one that no reasonable decision-maker could reach on the state of the evidence that the LAA had gathered and in the absence of further inquiry. On the basis of such evidence as it had gathered, the LAA had no justification for leaping to that conclusion. Once the results of the consultation were obtained, there was enough information to give the LAA pause for thought about its assumption that bigger is better; but it took the risk of proceeding with the recommendation to the Minister without addressing the points made about the absence of evidence that existing schemes were not financially viable or that increasing the size of the areas covered by HPCD scheme contracts would be an improvement. The only response that was suggested was that data would be provided to bidders when the policy decision had been made. Whilst data could be provided about the size of the pre-existing schemes, no data was available to connect small schemes with lack of viability.
  5. The Claimant therefore succeeds on this ground. The Defendant failed to discharge his Tameside duty of inquiry and the decisions he reached in the absence of any evidence to support it were fatally flawed.

BREACH OF THE PUBLIC SECTOR EQUALITY DUTY

The judge then considered the argument that the scheme breached the Equality Act.

  1. The only evidence of any assessment of the equality impact of the decisions under challenge was the “equality statement” contained in the consultation response, and that did not consider these matters. Nor did it purport to address all the equality concerns raised by consultees. In the light of the scant information with which the relevant Ministers were provided, they cannot personally have had due regard to the relevant equality impact issues. The Ministerial Submission of 29 March 2017 contained less analysis and information than the “equality statement” in the draft consultation response, and the final Ministerial Submission of 7 July 2017 said nothing at all about the PSED.
  2. In my judgment if, as is the case, there is a real risk that in consequence of the restructuring of scheme areas, clients using the HPCD service will no longer have the same access to the “wrap around” services that are not covered by Legal Aid and which may make all the difference to whether they end up homeless and destitute, that is something that the Ministers should have been made aware of, and should have given due regard. I accept, of course, that the concept of “due regard” is not the same as a requirement to give PSED considerations any specific weight. Weight is a matter for the decision maker alone.
  3. However, in this case, I regret to say that the evidence falls a long way short of demonstrating that any Minister (in person) gave due regard to the equality impact of the proposed changes. This is because the information collated by the LAA and placed in summary form before the Minister failed to identify in sufficiently unambiguous terms all the adverse effects that the proposed changes could have on users of the service (whose constituents contain a disproportionate number of people with protected characteristics under the Act). It portrayed the potential for agency arrangements as the cure for all ills, which it patently is not, and it failed to spell out what could happen if an agent were not used, or what the position would be in respect of those matters it had identified for which the ability to use agency services would not provide an answer.
  4. Paragraphs 30-32 of the Ministerial Submission of 29 March 2017 are brief, and they are superficial. In my judgment they are woefully inadequate to bring home to the decision-maker all the information necessary to enable him to discharge the duty. The fact that the Minister was sent a copy of the draft Consultation Response as an attachment to that Submission does not make the Defendant’s position any stronger. I have already mentioned the fact that the Minister was asked to provide an answer within 24 hours, which would hardly have been sufficient time to carry out a proper consideration of PSED factors even if he had been fully and properly briefed, which he was not. Therefore, the second ground of challenge to the decision is also made out.