A leading East Midlands firm is to take court action against the lord chancellor Chris Grayling over restrictions on its legal aid contract.

Bhatia Best has started legal proceedings in the High Court challenging the scope of its legal aid contract to pursue judicial review claims in housing cases.

The firm, which has the largest public law legal aid contract in the country, pursuing hundreds of claims a year, seeks a declaration as to the contract scope.

Since the Legal Aid Sentencing and Punishment of Offenders Act came in to force in April, removing many areas of civil law from legal aid, the firm claims that the Legal Aid Agency (LAA) has determined that some claims that are decided on judicial review principles can no longer be conducted under the firm’s public law contract.

Associate Stuart Luke said that the problem has arisen in cases taken under Section 204 of the Housing Act 1996, which allows challenges on points of law to housing authority decisions.

Luke said that despite case law stating that challenges on points of law are judicial reviews, the LAA asserts that they fall outside the firm’s public law contract.

The LAA has continued to grant legal aid for the cases, but the firm says it has had to secure funding through the ‘more difficult and back-door route’ of individual case contracts for each client.

In a statement, the firm said: ‘This route to legal aid creates additional hurdles and delays in securing funding, and undermines our ability to advise and represent our clients to the greatest effect.’

It seeks a declaration that the cases continue to fall within the public law category of work, enabling it to continue to meet its clients needs with ‘clarity and certainty, and ensure they have timely access to justice’.

The Ministry of Justice said it is defending the case. ‘Given the current litigation, we are unable to comment in depth, but, for the avoidance of doubt, homelessness appeals are within the scope of legal aid under LASPO and may be conducted by a legal aid provider who holds a housing contract.’