Member Article

With the COVID-19 Inquiry (“the Inquiry”) now open, and applications for Core Participant status for Modules 1 and 2 currently being assessed, potential applicants will need to consider how their participation in the Inquiry will be funded.

Section 40 of the Inquiries Act 2005 provides that funding for legal representation can be awarded out of the Inquiry budget. As the Inquiry will be funded by the government this is, in effect, public funding. The Inquiry has published its Costs Protocol and the Section 40 Determination from the Prime Minister, which together set out the criteria those wishing to apply for funding must fulfil. In this article we consider the requirements attached to public funding, and the consequent likelihood of a business successfully securing such funding to cover its participation in the Inquiry.

Public Funding

The Inquiry has stipulated that any application for an award of legal expenses in accordance with section 40 of the Inquiries Act 2005 should be made following designation as a Core Participant and in accordance with the deadlines and timetable for each module set out on the Inquiry website. Decisions regarding applications for such awards will be made in accordance with the Inquiry’s Costs Protocol and the Prime Minister’s Determination under section 40(4) of the 2005 Act, both of which are available on the Inquiry website.

1. The Inquiry’s Costs Protocol (‘the Costs Protocol’)

The Costs Protocol sets out the general principles relating to applications for public funding. These include that the applicant is either a person attending a Public Hearing of the Inquiry to give evidence or to produce any document or other thing, or a person who, in the opinion of the Chair, has such particular interest in the proceedings or outcome of the Inquiry as to justify an award. The Costs Protocol also requires the Chair to take into account the financial resources of the applicant and whether making an award is in the public interest. It is therefore envisaged that awards will be made only in cases where the Chair decides that:

• the applicant:

• has a direct link to, and evidence to provide in respect of, the matters set out in the Inquiry’s terms of reference; and/or
• has a significant interest in an important aspect of the matters set out in those terms of reference; and/or
• may be subject to explicit or significant criticism during the Inquiry’s proceedings or in the report, or in any interim report.

• the applicant would be prejudiced in seeking representation if they were in any doubt about funds becoming available and there are no other means by which such representation can be funded; and

• it is fair, necessary, reasonable and proportionate to make an award.

Awards will generally not be made, therefore, in respect of the legal expenses of substantial bodies, or of individuals who could reasonably expect these expenses to be met by such bodies, unless there are special circumstances which justify a call on public funds [our emphasis].

The Costs Protocol also sets out limitations on the type of legal work that can be covered by an award, and the information that must be included in an application, including but not limited to:

• the reason(s) why legal representation is considered necessary;
• which Inquiry module(s) the application relates to, with reasons;
• the extent of the applicant’s financial resources and confirmation that there are no other means by which such representation can be funded;
• the nature of the public interest that will be served by an award being made from public funds (see rule 21(2)(b) of the Inquiry Rules 2006); and
• the nature and function of the legal representation for which the award is sought.

In addition, the Costs Protocol reiterates the message delivered by the Chair in opening the Inquiry that, wherever possible, and in order to minimise the expense, applicants are encouraged to instruct recognised legal representatives who are already retained by other parties. The Chair will determine applications for awards which, where successful, will be subject to a number of terms. The Chair and Solicitor to the Inquiry may vary the application and terms of the Costs Protocol on a case-by-case basis where necessary to the proper conduct of the Inquiry, subject to the requirements of the Prime Minister’s Determination.

2. The Prime Minister’s Determination (‘the Determination’)

The Determination is to be read in conjunction with the Costs Protocol, and states that given the exceptional nature and gravity of the COVID-19 pandemic, the Prime Minister recognises that it will be in the public interest for certain applicants to be provided with funding for legal representation without investigation as to the financial resources otherwise available to them. This exception only applies to families of people who were infected with COVID-19 and who died (including people who not unreasonably believe that they or their family member were so infected).

The Determination also lists a number of conditions and qualifications, including that payment will only be made for work that is properly evidenced, directly related to the work of the Inquiry as determined by the Costs Protocol, and can be identified as having been done in an efficient and effective manner, avoiding unnecessary duplication and making the best use of public funds. It also states that, having regard to the inquisitorial nature of the Inquiry, an award shall not be made in respect of investigative work undertaken by an applicant’s recognised legal representative or in relation to obtaining an expert's report, save in exceptional circumstances.

Conclusions

In the absence of public funding being available, core or other participants in an Inquiry will usually have limited options available; self-funding being the most obvious. Conversations with insurers and brokers regarding insurance policy coverage are worthwhile to assess whether any legal expenses funding is available under any relevant policies, as can be the case. In certain cases, where there may be a clear positive or imperative that might be seen by the public at large, a crowdfunding approach could also be considered.

The Costs Protocol and the Determination make it clear that the process for securing public funding will be stringent; it is therefore likely only to be accessible to individuals with no recourse to alternative funding. We think it is improbable that many if any businesses will be able to benefit from public funding for the purposes of representation at the Inquiry, even those companies who find themselves required to give evidence or invited to apply for Core Participant status. We have recent experience in another Inquiry of a (reasonably well-funded) charity who was designated as a Core Participant and had its application for public funding rejected on the basis that it could fund its own participation, regardless of the fact that its funds inevitably would have been better directed to its charitable activities.

If public funding were to be awarded, it is likely that a large number of businesses would be required to share legal representation, with strict limits on the level of input permitted by the legal representatives. Spending on public funding will always be closely scrutinised, so insurance funding or self-financing are likely to be the only viable options for most businesses considering participation in the Inquiry.

 

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