When is an award for public funding for legal representation necessary?

Introduction

A recent High Court judgment reaffirms the Chair’s broad discretion under Section 40(4) of the Inquiries Act 2005 (2005 Act) to decide whether an award for public funding for legal representation is necessary, fair and reasonable and provides some useful and salutary lessons for charities and other organisations that may be considering seeking public funding for engagement in public inquiries.

In the matter of R(on the application of the Traveller Movement) v the Chair of the UK Covid-19 Inquiry [2024] EWHC 3283 (Admin), the claimant sought permission to apply for judicial review to challenge Baroness Heather Hallet’s decision to refuse a core participant public funding. In his refusal of permission, Mr Justice Chamberlain clarified the tests to be applied when deciding whether a core participant is a ‘substantial body’ and whether there are ‘special circumstances’, terms drawn from ministerial directions (in this case from the Prime Minister) relating to the provision of funds for legal costs.

Factual background

The claimant was the Traveller Movement, a registered charity representing the Gypsy, Roma and Traveller communities in the UK. The body is a core participant in Module 4 of the UK COVID-19 Inquiry. In September 2023, it applied for public funding from the Chair of the Inquiry on the basis that it could not afford self-fund legal representation.

Section 40 of the 2005 Act gives the Chair the power to award funding for legal representation subject to conditions imposed by the Minister.  In this case the relevant conditions are contained in the Notice of Determination by the Prime Minister (Boris Johnson MP). The key provision being:

Awards should not be made in respect of the legal expenses of ‘substantial bodies’, unless there were ‘special circumstances’ which justified a call on public funds.

On 2^nd November 2023, the Chair refused the claimant’s request for public funding noting that it was a ‘substantial body’ with sufficient finances and therefore should be capable of funding its own representation. Further, that there were no ‘special circumstances’ to justify an award. 

On 13 November 2023, the claimant made a renewed application explaining why its role as a charity amounted to ‘special circumstances’ and referencing the likely reduction of its reserves in the coming financial year. They resultantly argued that they could not be a ‘substantial body’ as meeting the expenses of the inquiry would jeopardise their ability to fund essential community projects. 

On 11^th December 2023, the Chair refused again, noting that the claimant had substantial income and reserves and did not set out any special circumstances that justified the use of public funds. However, she noted her willingness to review the position in April 2024 considering the anticipated income reduction.

On 16 May 2024, the claimant submitted a renewed application setting out its updated reduced income.

On 22^nd July 2024, the Chair once again declined the application as she was not satisfied that there had been a significant deterioration in the claimant’s financial position.

The claimant applied for a judicial review arguing, amongst other points:

1. The Chair failed to properly consider the test for granting funding in determining whether the claimant was a ‘substantial body’. In support of such, the claimant relied on the policy prior to the 2005 Act[1] which stated that funding should be granted if the body would otherwise be prejudiced by seeking representation.

2. The Chair failed to properly consider whether there were ‘special circumstances’ justifying a grant of funding

The Defendant argued the claim was out of time since the Chair had determined in December 2023 that the claimant was a ‘substantial body’ and there were no ‘special circumstances’ and that the offer to thereafter review the position was limited to consideration of whether there had been a deterioration in the claimant’s financial position.

The decision

Mr Justice Chamberlain dismissed the out of time argument, stating that the claimant was justified in thinking that the Chair’s letter from December 2023 offered to review the funding decision generally, and did not make clear that the review promised in April was limited to the financial position solely or that the Chair’s finding on whether the claimant was a ‘substantial body’ or whether there were ‘special circumstances’ was final.

With regards to the substantive grounds, the judge clarified that a court considering the proper approach to judicial review on the questions of ‘substantial body’ and ‘special circumstances’ should be guided by the principles set out in R v Monopolies and Mergers Commission ex p. South Yorkshire Transport Ltd [1993] 1 WLR 23 in which Lord Mustill held that such questions had to be approached in two stages:

• First, when interpreting protean or imprecise terms, (i.e. ‘substantial body’) the court should avoid the danger of “redefining it, thrusting on it a spurious degree of precision” (at [29]).

• The second stage involves an evaluative judgment by the decision-maker and “the court is entitled to substitute its own opinion for that of the person to whom the decision has been entrusted only if the decision is so aberrant that it cannot be classed as rational” (at [32])

In relation to whether the claimant was a ‘substantial body’:

• The Prime Minister’s Notice of Determination was clear and was to be approached in its own terms, rather than by reference to any policy pre-dating the 2005 Act.

• In deciding whether the claimant was a ‘substantial body’, the Chair does not need to analyse individual funding sources or what activities the body would have to forego in order to fund representation. All that is required is a broad judgment about the size and resources of the body and their resultant capabilities to fund it themselves. This evaluative judgment needed to be made against the duties imposed by Section 17(3) of the 2005 Act to act with fairness and to avoid unnecessary cost.

• The Chair’s decision that the claimant was not a ‘substantial body’ was not irrational or wrong.

Considering whether there were ‘special circumstances’:

• The wording was broad, and the Prime Minister deliberately did not define what could constitute ‘special circumstances’.

• There was nothing unlawful about the Chair’s approach, which was to ask herself whether the claimant could be expected to fund itself (with a more detailed focus on their ability to apply income and reserves to that purpose).

• There was no justiciable error in the Chair’s decision of December 2023 that, despite the centrality of issues concerning the Gypsy, Roma and Traveller communities to Module 4 of the Inquiry, given the claimant’s resources, a payment of public funds was not justified. There was also no error in her finding in July 2024 that the claimant’s financial position had not significantly deteriorated.

• It is not enough for a charity to say that it is not allowed to divert resources from other priorities. Charities must make difficult decisions, but so must those charged with disbursing public money for legal representation.

The practicalities

This ruling clarified that when attempting to substantiate a funding request, charities cannot solely rely on the fact that funding legal costs may jeopardise their broader operational work. This is the case even for core participants who may be central to the issues examined by the inquiry or representing marginalised communities. This case therefore underscores the Chair’s wide discretion when interpreting ‘protean’ terms like ‘substantial body’ and ‘special circumstances’ and reaffirms the importance of their obligation to ensure fairness and avoid unnecessary costs when making public funding decisions.

Charities and other organisations seeking public funding will need to scrutinise cost protocols, anticipate the Chair’s assessment of their resources and special circumstances, and subsequently produce a comprehensive application that provides sufficient justification for their claim. Applications will need to be framed to not only demonstrate a financial need, but present clear evidence of restricted and unrestricted reserves and detailed explanations of why funding cannot be diverted from them. It may be prudent for such bodies to also stress that the funding request is a means of last resort and explain the attempts made to reallocate resources, cut costs, and explore other funding options.

The case serves as a reminder to charities and other organisations to plan strategically, reassess their financial strategies and explore alternative solutions when participating in public inquiries as public funding is not always guaranteed.

TLT’s Public Inquiries and Public Law team can provide expert advice on funding applications for public inquiries and assist organisations with efficiently navigating the funding request process.