From 1 October 2012, many defendants who don’t qualify for Legal Aid will find that they are liable for their legal costs, even if found not guilty. This represents a fundamental shift in criminal justice in England and Wales, and may add further pressure on defendants to plead guilty for financial, rather than legal reasons.

The changes were brought into force by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (“the Act”), and relate to Defence Costs Orders (“DCO”), which allow payment from central funds of the defendants’ costs at the end of a trial where he or she has been acquitted.

The main changes are:

  • In the Crown Court, those acquitted of indictable offences will no longer be able to claim any of the costs of their defence;
  • In the Magistrate’s Court, defendants may only claim costs if the matter is dismissed in the preliminary stages, without a trial. Given that the clock is only deemed to start running at the point of issuing a summons, and that fees are capped at legal Aid rates, the amounts reclaimable in these cases are likely to be vastly reduced;
  • DCO’s for corporate defendants have been virtually abolished, so companies that have been acquitted of even the most serious crimes will no longer be able to reclaim any of their costs from public funds.

There are some exceptions. Costs for advice and representation in the Supreme Court may still be reclaimed, as may those in the Court of Appeal where an appeal succeeds by way of insanity or disability, or where costs have already been awarded in a lower court. But worryingly, the Act allows the Lord Chancellor to turn the screw still tighter, and remove these exceptions by means of regulations, without Parliamentary debate.

It is hard to overstate the seriousness of the shift that is taking place.

The principle that the loser pays the winners’ costs is fundamental to English law, and is the foundation to the system of checks and balances that prevents litigators and prosecutors from launching actions on a whim. This principle has now effectively been abandoned for those who do not qualify for Legal Aid. At the same time, prosecutors have been given a financial incentive to push hopeless cases to trial in the Magistrate’s Courts to avoid having to pay defence costs.

Most criminal solicitors have heard of cases where defendants have entered guilty pleas because they were worried that they wouldn’t be able to afford a defence. The post-war reforms of English law were supposed to guarantee access to justice for all, and equality of arms between defence and prosecution.

Little by little these reforms are being undone, and it seems we are now tip-toeing towards a system of justice for those who can afford it and rough justice for those who can’t.