The Court of Appeal has ruled that the government's guidance on exceptional case funding for legal aid in immigration cases is unlawful.

Master of the rolls Lord Dyson today stated that the guidance ­giving litigants a safety net for legal aid funding in exceptional circumstances is not compatible with the European Convention on Human Rights.

Dyson also noted that the guidance wrongly states there is nothing in current case law putting the UK under a legal obligation to provide legal aid.

The director of legal aid casework had refused six applications for exceptional case funding, which was introduced under the Legal Aid, Sentencing and Punishment of Offenders Act in April 2013.

The applications each challenged the denial of exceptional case funding, and in the High Court Mr Justice Collins subsequently granted judicial review in all six.

The government has now lost on appeal in three of the cases,­ Gudanaviciene, Reis and B, and its appeal was allowed in two others. The sixth case was not challenged by the lord chancellor.

Dyson, in agreement with Collins, concluded the guidance for allowing exceptional case funding was not compatible with article six of the ECHR (relating to right to a fair trial) and article 47 of the EU Charter of Fundamental Rights.

The judge said the government's guidance 'impermissibly sends a clear signal to caseworkers and the director that the refusal of legal aid will amount to a breach only in rare and extreme cases'.

Dyson also said that the guidance is not compatible with article eight of the ECHR, relating to the family life, in immigration cases.

The master of the rolls disagreed with Collins that exceptional case funding is required under LASPO only when the applicant can establish to a 'high degree of probability' that without it there would be a breach of procedural rights.

A Law Society spokesperson said today's ruling should act as a ‘wake-up call’ to ministers.

He added: ‘The Ministry of Justice has been far too restrictive in granting exceptional funding, leaving some of the most vulnerable people with no access to justice and undermining the rule of law.’

From 1 April 2013, the date the scheme was introduced, to 31 December 2013, a total of 1,151 applications for exceptional funding were made to the Legal Aid Agency.

Of those, 1,083 were determined, resulting in funding being granted in 35 cases (3% of cases).

Jon Black, president of the London Criminal Courts Solicitors’ Association, said the ruling was 'a vote of no confidence from the Court of Appeal and a blow for the Ministry of Justice. It shows the government’s misplaced determination to ignore warnings  and continue hell-bent on a course of denying justice to those most in need of it, won’t wash with our judges.' 

A Ministry of Justice spokesperson said: ‘We note the judgment and will carefully consider our next steps. We continue to believe that the exceptional funding scheme is functioning as intended. Its purpose is to provide funding where it is legally needed.  

‘Legal aid is a vital part of our justice system but resources are not limitless and must be properly targeted at the cases that need it most. The system must be sustainable and fair for those who use it and the taxpayers who pay for it.’

The full judgment is available here.