Legal Aid and trapped capital - Goodman Ray
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Legal Aid and trapped capital


R (oao GR) v Director of Legal Aid Casework [2020] EWHC 3140 (Admin)

 

Context

 

Legal aid is a welfare provision offered by the Government to enable those who do not have the means to access legal representation. Between 2019 – 2020, the UK Government spent approximately £1.7 billion on the scheme, although this has greatly declined throughout the years.

 

To be eligible for legal aid, a client will need to prove that their case has the merits and the means. The Legal Aid Agency will then assess an individual based on their income, capital and merits, to determine whether all, part, or none of their legal fees can be covered. As a result, most homeowners will not be eligible for legal aid as their capital will be worth more than £8,000.

 

Legal aid contributes towards a range of expenses that may be a necessary element of the legal process including solicitor and barrister fees, alcohol and drug testing and supervised contact. Legal aid is an invaluable scheme that ensures legal representation is available to all, regardless of their income.

 

The Case

 

The case of R (oao GR) v Director of Legal Aid Casework [2020] EWHC 3140 (Admin) considers the application of GR regarding legal aid, in the hope to publicly fund her private family law proceedings regarding the custody of her children and the jointly owned property. As GR claimed to be a victim of physical, emotional and sexual abuse from her former partner, she was able to meet the necessary requirement for the merits test. Furthermore, as she was in receipt of Universal Credit, she also met the income criteria as part of the means assessment. However, as the joint owner of a property, the Legal Aid Agency refused her application on the grounds that her disposable income was above the minimum threshold.

 

If an individual has assets of monetary value, the Legal Aid Agency view you as having the means to contribute towards your legal fees. However, GR argued that she currently had no monetary value within her jointly owned property, as her ex-partner would not consent to her borrowing money against the property. Furthermore, at the time of the assessment, the sale of the property was subject to a family law dispute.

 

The Applicant put forward the following arguments:

  • Firstly, the Director failed to properly apply the Means Regulations and was not bound by regulation 37 which directed the value of her interest in her home as the hypothetical sale value. Rather, the Applicant argues that the Director should have exercised his discretion as per regulation 31(b) and valued the house at nil; and

 

  • Secondly, by denying the Applicant legal aid, her human rights under Articles 6 and 8 of the Human Rights Act 1998 were at risk of being breached.

Judgement: The court found that the Director’s application of the Means Regulation was incorrect and that the Director did have discretion to value the Applicant’s house as nil under regulation 31(b). Mr Justice Pepperall was satisfied that if an individual had no access to the value of their assets, then they could not use it to fund their litigation. Therefore, legal aid applications that are denied, based on their unrealistic prospect of the Applicant funding their own legal representation, denies the Applicant access to justice.

 

Implications

 

The case of R (GR) v Director of Legal Aid Casework has set the precedent for future applications to the Legal Aid Agency. The Director of the legal aid casework has the discretion to value an Applicant’s capital, other than money, on an equitable basis in all civil areas of law. Therefore, an Applicant may be able to argue that their ‘trapped’ capital should be excluded from their means assessment by affording it a ‘nil’ value.

 

The implication of this case could mean that many who would previously have been denied legal aid due to their capital, can now make an application under this precedent. Applicants who have been refused legal aid on this basis prior to 24 November 2020, are now being invited to make a new application in light of the judgment.

 

Rachael Charlotte Brown

Paralegal

11.11.2021

 



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