The Claimants are a company limited by guarantee, the National Association of Guardians ad Litem and Reporting Officers (NAGALRO), a professional association representing Guardians ad litem and Reporting Officers (GALROs) now known as Children's Guardians. The Defendants are the Children and Family Court Advisory and Support Service (CAFCASS), created by statute on 1^st April 2001.

The Claimants seek Judicial Review on a decision of the Defendants made on 27th June 2001 and disclosed by a letter of the 6th July. The earlier Judicial Review application was made otiose by the decision by CAFCASS of the 27th June. There is an outstanding issue of costs.

The history: GALRO's have assisted the court as the independent voice of the child since 1984. Since the Children Act 1989, which was implemented in 1991, the GALRO role has become of fundamental importance in Public Law proceedings. The principal duties are set out in the Family Proceedings Amendment Rules 2001, Adoption Amendment Rules 2001, and other rules. They are recited in some detail in the first statement of Susan Bindman. Guardians are appointed by the court and answerable to the court. They have to make recommendations that are often unwelcome to one or more of the parties. They may find themselves pressured by the Local Authority and by the parents. They must be, and should be seen to be, independent of the other parties. They are for the children and they must represent the children’s wishes and make sense of them when they differ from the children’s best interests. The children they represent are among the most vulnerable in society. Their role is crucial to the viability of the family justice system. ‑ see the Cornwall case (1992)

There are or were 860 Guardians in England and Wales of which 113 were employed. The majority have self-employed status. They work under a variety of contractual arrangements under 57 former panels until 31 March 2001.. Their fees are paid at an hourly rate plus travel fees. Obviously there is a strong case to bring these disparate arrangements together. The new Criminal Justice and Court Services Act 2000 brought together the services of the former Family Court Welfare Officers, Guardians ad litem and the Official Solicitors representing children. The Act created a single service to safeguard the welfare of children. See S11 to S25 and Schedule 2 of the CJ and CS Act 2000. CAFCASS came into existence on 1^st April 2001.

Unsurprisingly there was need for a good deal of preparatory work. The plan was that CAFCASS would come seamlessly into existence with the Guardians' contractual arrangements to be in place. The Lord Chancellor set up a Project Team to achieve this. Unfortunately this was not to be. There was serious disagreement about the terms under which the Guardians would work for CAFCASS.  The statutory powers for decisions about the terms of engagement lay with CAFCASS subject to approval by the Lord Chancellor (schedule 2, para 6). CAFCASS said nothing the Project Team did was binding. Whilst legally speaking this is true, the reality is that if terms had been agreed then arrangements would have moved swiftly into place.

From the start the Guardians were to have the alternative of an employed or a self‑employed contract. The consultation document Support Services in Family Proceedings 1998 para 3.26 stated that in a new unified service it is expected that practitioners would be employed or self‑employed. In the long term it would be up to the new service to establish the balance in each area and region. There was a snag with the Inland Revenue who have developed strict criteria for self‑employment - Schedule D and Schedule E. For their criteria for self-employment to be met, there must be clear separation between the purchasers of services and the provider. The position is broadly that there must be clear water between the self-employed practitioner and the contractor. There are serious consequences for someone treating a schedule E as a schedule D.The CJ & CS Act received Royal Assent in Nov 2000. The commencement date was 1^st April. Regulations came into force in January 2001. The Lord Chancellor appointed shadow Board members. On 22^nd December 2000 David Lye, Project Team Director, wrote to panel managers a letter to distribute to self-employed Guardians about their self-employed status. The letter said "I very much see a continuing role for self‑employed Guardians and want to develop a contract which would be acceptable to the IR and fair to you. We may need to reshape the contracts considerably but hope to produce something which is fair and reasonable, even in the face of considerable uncertainties.”

The Project Team met the Inland Revenue and sent them a draft self-employed contract on 23rd December 2000. The PT hoped that this contract would be acceptable to Guardians and was based on graduated fixed fees. There was a fundamental disagreement over fixed fees. It was not acceptable to NAGALRO ‑ they wanted hourly fees, not graduated fees.

The option for self‑employed Guardians was set out in David Lye’s letter of 27^th February 2001 to Guardians. The letter contained details for options for self employment which are to apply after 1^st April and gives details of the graduated fees which are to be offered. The letter goes on to say; "Once you have reached a decision you will want to let the Panel Managers know in the area in which you work, so that they will be able to allocate work to you after 1^st April."

That letter led to the first JR application on 3^rd May by NAGALRO on the basis that the graduated fees proposal was irrational. NAGALRO wrote to CAFCASS (on 14^th March)[2] to say the decisions to remunerate Guardians  as notified by Mr Lye on 27^th February was irrational. The next important event was the speech on 19^th March by Mr Hewson, chairman designate of the CAFCASS Board, to the NAGALRO annual conference. He was conciliatory in tone and acknowledged a history of poor communication and lack of trust. He said he wanted a proper working relationship with all self-employed Guardians. He regretted that the document sent out on 27^th February 2001 was complicated and difficult to understand and he hoped to simplify it and address the concerns of Guardians. He proposed a 6-week moratorium to give time and space for further consideration of changes needed and to rebuild confidence and trust. The moratorium was subsequently extended.

The formal creation of CAFCASS came on 1^st April 2001. After that date there was no discernible change in the desire to negotiate self‑employed contracts. Jane Kennedy MP wrote to The Times on 9^th April;  "The Department had been working hard with the Guardians to retain their services and are striving to meet their desires regarding contractual arrangements ".

On 4^th May 2001 the Board considered the matter and resolved to retain the existing service and to offer self-employment that met the Revenue test.

The letter from the Chief Executive of CAFCASS to NAGALRO on 6^th May leaves me in no doubt as to the approach being taken. She said  that "Guardians would be offered a choice of contracts, including a self-employed contract on a graduated fees basis. The self‑employed contract would be improved to promote ease of use and would be reviewed after 6, 12 and 24 months."

On 11^th May she wrote to all Guardians enclosing two proposed contracts, one employed and one self‑employed. It was said that this was not a final offer but allowed a further period of consultation prior to further improvements. Comments were invited by 14th June, which was stated to be end of the consultation process. Then there would be a formal offer after approval by the Lord Chancellor and further time for NAGALRO to consider this. Until then all work on cases would be paid under existing arrangements. On 8^th May the Chief Executive wrote to Guardians saying that she continued to meet NAGALRO and expected to write further about the new offer. 10 regional Forums were to be held.

On 4^th April 2001 Virginia Bottomley MP wrote to the Lord Chancellor asking for an urgent review of the Guardians’ situation, suggesting a modification in the proposed system of remuneration. The 21st May reply from the Lord Chancellor described the background, enclosed Ms Shepherd’s letter of 11^th May and set out a series of principles adopted by the CAFCASS board which should guide the consultation process. The Lord Chancellor’s letter concluded, "The paramount concern is for the children that we serve, and offering a professional service. Self-employed Guardians share our concern. I am sure that the Guardians will come to appreciate the benefits and protection of the new self-employed arrangements."

The claimants rely on this letter as it develops the clear picture that both options would be available. Mr McCarthy for CAFCASS argues that this letter says nothing about what CAFCASS will do if negotiations break down, and that the letter has nothing to do with CAFCASS' consultation process. He is keen to emphasise that, within the statutory process, CAFCASS is the decision maker on the terms under which Guardians were to be engaged. He wishes to put distance between CAFCASS, the Project Team, and this letter. Considered from the viewpoint of legitimate expectation it is unrealistic not to look at the whole picture, where CAFCASS does nothing to create a different picture  themselves. 

On 1st June CAFCASS sent Guardians a document of Frequently Asked Questions and Answers about the contracts, which included the following questions and answers;

Q: Are you going to discuss these contracts with NAGALRO? A: We have invited NAGALRO to discuss these contracts.

Q: Why set out employed and self-employed contracts?  A: We are sure that some want employment, some self-employment. The Board wants to offer a choice.

Q: Do these contracts constitute an offer?  A: No ‑ we are inviting your views. The Chief Executive will make proposals to the Board. The Board will put its decision to the Lord Chancellor to approve. 

Q: When will the offer be made? A: We hope to make the offer by the end of June. We want to give you time to consider the offer - four weeks approximately – and then improved contracts will be sent out. Until then you will work on your existing arrangements.

Q: Will Guardians be offered both contracts? A: All self-employed people will be offered both. There will be no competitive selection. There will be an independent review at 6, 12 and 24 months.

Q: If there are graduated fees, will CAFCASS ensure that time is used effectively and efficiently in the court process? A: Yes.

An e-mail was sent to NAGALRO on 30^th May asking them to meet with CAFCASS to discuss contracts. A responding e-mail the following day agreed to meet. The meeting took place on 14th June. On 13th June NAGALRO was given permission to apply for Judicial Review, and were ordered to file their statements within 14 days.  Each side has produced a note of the meeting of 14th June which agree. NAGALRO produced position statements going back to 1998 for distribution to the Board on 15^th June.

Diane Shepherd said in her statement at para 21 that the representations by NAGALRO make it clear that NAGALRO was not prepared to compromise on their objections to the graduated fees proposal. I do not agree. It is true that NAGALRO did not like graduated fees , but nowhere is it stated that compromise on graduated fees is impossible. NAGALRO said that money was not the only issue. NAGALRO wanted to delay implementation of the CAFCASS proposal until after the first Judicial Review (JR1). NAGALRO also wanted the negotiations to continue.

The Board met on 15^th June but a final decision was deferred about whether to issue a contract for services so that the board could consider the bundle of documents delivered by NAGALRO the previous day. The point was made in discussion that the arguments for a completely managed service were compelling. and were added to the criteria. Mr Horowitz submits that a “managed service” is synonymous with an all-employed service, and I agree.

The next meeting of the CAFCASS board was on 27th June, the same day as Diane Shepherd signed and served her evidence in the 1st JR application. There was no suggestion in her evidence that an option was to be no self‑employment. She was not obliged to make any mention of this, but, the manner in which this was sprung on Guardians subsequently, was hardly conducive to good relations.

The Board had the Chief Executive’s paper prepared for 15th June considering options and criteria. It was not produced in evidence but it would have looked at not offering a self‑employed contract. The minutes record that two other papers were presented to the Board on 27^th June, one supporting not offering self-employment and the other arguing the contrary case.

It is of note that the minutes of the Board meeting record that the members wanted to see only a “managed service”. Self-employment in any form was said to be incompatible with this. One member raised concerns that, throughout the consultation, CAFCASS had not said that it needed only a managed, employed, service. The decision was to withdraw self-employment. In the minutes under “Communications” the timetable is set out.  A letter to the Guardians was to go out on 3rd July but it was not posted until 6th July. Documents had to be returned by 27th July, a bare 3 weeks later, including postage time. The timetable covered a period when many Guardians were away on holidays. There were delays of 9 days between the Board meeting and the letter being posted which should have been anticipated and avoided. Such problems exacerbated the relationship with Guardians at a critical time. Guardians were asked to make a critical decision  which affected their livelihoods in an unreasonably short period of time. The fact that extensions were granted to some Guardians emphasises the point I make. I quote from the Board minutes, "The key messages need to be revised and sold as an honest decision” CAFCASS needs to improve its communication skills.

On 27^th June there was a complete volte face There had been no previous indication that CAFCASS wanted an employed only service. It was hardly surprising that one member of the Board raised concerns that nothing had been said about this in the consultation process. The Board seems to have given little if any thought the effects of its change on the relationship with the Guardians delivering the service.

CAFCASS does have to fulfil its statutory obligation to provide the service. The Board decided that long-term management goals outweighed short-term disadvantages to relationships. It is entirely for CAFCASS to decide on which basis it wishes to employ its service. In the end market forces will decide, but enough people of sufficient calibre are needed to provide the service. This dispute is not entirely about money.

A fair reading of the documents is required, and in my judgement, right up to the bombshell of 27th June, the negotiations were conducted with an offer of two forms of contract, self-employed and employed. This is not a private law dispute, in which one party can pull out at the eleventh hour. The issue here is one of public law. When a public body conducts itself by following a particular course of action, there is a legitimate expectation that a change of course will be preceded by the opportunity to make representations about why it should not do so.

NAGALRO now says that the self-employed Guardians have a legitimate expectation that CAFCASS should give reasonable notice of the intention to make changes, so that NAGALRO can make representations about anticipated changes and bona fide negotiations and consultations can take place. CAFCASS did not say that it would be employment or nothing. As recently as 1^st June CAFCASS said they were listening to Guardians’ views and would provide improved self employed contracts. 

Mr McCarthy argued that the Project Team had to do preparatory work and the Project Team did not say CAFCASS would adopt this. The Project Team had to do preliminary planning and formulate a structure and operational framework. If the Project Team’s contract with Guardians had been discussed and agreed, it would have been taken up by CAFCASS. The plan was for  existing  contracts  to run for a year; however the Inland Revenue attitude would not allow this.

CAFCASS would hope, as indicated in Ms Shepherd’s letter, for the agreement of the Guardians. The bottom line was that they were hopeful, but, if it could not happen and agreement was not reached, it was not clear that  CAFCASS would dictate terms on a “take it or leave it” basis. 

Mr McCarthy for CAFCASS has said that CAFCASS had the last word on contractual terms and this should have been obvious to Guardians. CAFCASS never made any positive representations that there would not be a mixed economy or that they would pull up the drawbridge on all further discussions. He says NAGALRO should have realised that CAFCASS could dictate the terms and arrangements pursuant to the para 6.2 of schedule 2 of the Act, subject to the approval of the Lord Chancellor. This should have been apparent to NAGALRO.  And, in any event, NAGALRO was so implacably opposed to graduated fees that they would not negotiate on any other basis. In my judgment, that is not a correct appraisal. NAGALRO was opposed to graduated fees but it does not mean that they were never willing to agree a contract on another graduated fee or other basis. NAGALRO did not maintain a rigid stance.

There is a procedural expectation, not a substantive expectation, claimed by NAGALRO. I am reminded that this is a developing doctrine which is underpinned by fairness. Fairness includes equitableness. In the public authority case Queen v IRC,  Bingham LJ, ex parte MFK Underwriting  (1990) the case offers a valuable development to this doctrine. If a public authority indicates one course of action it creates a legitimate expectation, and if it then withdraws it, it creates a situation of unfairness. This doctrine is rooted in fairness and is not one way; it depends on fair and open dealings. Mr McCarthy argues that an enforceable claim of legitimate expectation depends on proof of promise as to procedure.

I now turn to CCSU v Minister for Civil Service Appeal case (“the G.C.H.Q. case”). There is a long-standing practice to consult before a change of working conditions which is established in this case, albeit the appeal failed on national security grounds.

Turning to the case of R v London Borough of Newham ex parte Manik Bibi (2001) EWCA Civ 607 Lord Justice Schiemann (page 8) sets out the stages to judge all legitimate expectation, whether it be substantial or procedural;

(i)      What has a public authority committed itself to?

(ii)    Does it propose to act unlawfully?

(iii)    If it does, what should the court do about it?

This is helpful and I adopt these.

In answer to (i) I find from the evidence, if CAFCASS had done nothing or said nothing to set up a legitimate expectation the situation would be different. In my judgement, CAFCASS’s conduct cannot be viewed in isolation. The Project Team and the Lord Chancellor’s letter form the factual matrix from which the conduct and statements of CAFCASS must be judged. NAGALRO should have been given a proper opportunity to argue its case. They were not told that the end point was that there would be only an employed contract.

That this is unlawful is easily answered in the affirmative. The issue of the abuse of power begs the question as to where the line is to be drawn. This appeals to the procedural issue. That NAGALRO did not want the only self-employment on offer and therefore there was nothing to negotiate about puts the position too high. The notes of their meeting with CAFCASS on 14^th June shows that a number of other matters had to be considered. NAGALRO places no reliance in this case on a substantive expectation. Reliance is potentially relevant but not essential. In my judgement, objectively, CAFCASS has acted unlawfully.

Then (iii); what should the court do? Should it grant relief? Mr McCarthy says no relief should be granted to NAGALRO as CAFCASS has the statutory right to detail the terms of any agreement. The chaotic situation caused by this dispute cannot continue and further delays will make the present chaos worse. Diane Shepherd says in her statement of 13^th August (last line) that the present dispute is entirely unhelpful to the Family Justice system. I agree. I am therefore invited to make no order. However, the current position has been brought about by CAFCASS because of its conduct, and that of the Project Team before. It is greatly to be hoped that relations can be improved. It will have to be if the service is to fulfil its responsibility to children. At the hearing on 30th July I expressed the hope that negotiations could take place to resolve differences, but it has not been so. The situation has not been helped by the unhelpful terms of the letter from the Chief Executive of 7th August to NAGALRO. 

Of the existing self‑employed Guardians, the figures show that

            42% will not join CAFCASS

            37% will become employed.

            21% are undecided.

            The views of a further 300 Guardians are unknown.

Advertising has produced 157 appointable people.

This is a serious position, which needs to be remedied quickly, but it does not override the unlawful conduct of CAFCASS in not meeting the legitimate expectation of members of NAGALRO. I will grant the relief sought. The decision of 27th June of the Board to proceed no further with self‑employment will be quashed. There needs to be further negotiations on a short time scale.

Further submissions will be heard on the matter of undertakings.

Submissions.

Mr McCarthy:  The parties need to agree a timetable for the negotiation process. The present difficulties are that there are a number of gaps in the system where Guardians are not available. There are gaps in the South West region. Guardians have walked away from cases and CAFCASS cannot offer an employed guardian to do the job. CAFCASS needs to appoint an employed Guardian, thereby creating one less post for self-employed Guardians. We want to plug gaps, but not prejudice anybody's position.

Lunch Adjournment

In the afternoon there were legal arguments about costs. The result is no order as to costs in the first JR which means each side pays their own costs. In JR2, where the costs were far in excess of the first JR, CAFCASS has been ordered to pay NAGALRO’s costs.

CAFCASS gave the following undertakings to the court.

1.      CAFCASS will treat self-employed Guardians no less favourably then at present until completion of the consultation process as to what it will do about self-employed contracts.

2.      CAFCASS will keep the offer of a contract of employment as set out in the letter of 6th July 2001 open until completion of the consultation process.

3.      These preceding undertakings are subject to liberty to apply in the event that the timetable for the consultation process cannot be agreed.

4.      The preceding undertakings are subject to the following qualifications; -

a.       REGIONS WHICH AT PRESENT HAVE A MIXED ECONOMY (EMPLOYED AND SELF-EMPLOYED GUARDIANS).  CAFCASS will endeavour in each case to appoint a Guardian in accordance with the existing system of allocation from the existing number of employed and self-employed Guardians in the Region. If it is unable to do so then it will be at liberty to employ a new Guardian under a contract of employment so as to enable the Guardian’s role in the case to be fulfilled.

b.      REGIONS WHICH AT PRESENT HAVE SOLELY SELF-EMPLOYED GUARDIANS.  CAFCASS will endeavour in each case to appoint a Guardian from the existing number of self-employed Guardians in the Region. If it is unable to do so then it will be at liberty to employ a new Guardian under a contract of employment so as to enable the Guardian’s role in the case to be fulfilled.

5. It is understood and accepted by the parties that if a Guardian has been employed by CAFCASS in the circumstances set out in 4 above that CAFCASS will thereafter be entitled to continue to employ that person as a Children’s Guardian.

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