If the LSC decide fund a successful litigant, that decision must ordinarily be seen to carry with it something close to an assurance that the Commission will continue to support him in any subsequent appeal by the unsuccessful party; the LSC's decision not to continue funding without a protective costs order against the appellent was unlawful and public funding was therefore to continue.
The ICLR have kindly agreed for their WLR (D) case report to be reproduced below.
LEGAL AID — Funding — Appeal — Funded litigant successful in Court of Appeal — Unsuccessful litigant granted leave to appeal to Supreme Court — Legal Services Commission refusing to fund costs of resisting appeal unless protective costs order made against appellant — Whether approach of Legal Services Commission reasonable
As a general principle, if the Legal Services Commission funded a litigant who was successful in his cause, that decision should ordinarily amount to close to an assurance that the Commission would continue to support him in any subsequent appeal by the unsuccessful party.
The Supreme Court so held in refusing an application for a protective costs order made by the respondent to an appeal to the Supreme Court, E, against the appellants, the Governing Body and the admissions panel of JFS, and the United Synagogue, and in declaring that the Legal Services Commission was to continue funding E without a protective costs order.
LORD HOPE, giving reasons for a decision announced on 1 October, said that E had had the benefit in the proceedings below (reported at  PTSR 1442), and in the proceedings to date both in the House of Lords and the Supreme Court, of funding from the Legal Services Commission. He had sought the benefit of public funding for the substantive hearing of the appeal. But the Legal Services Commission had been minded not to provide him with that benefit unless he took steps to protect it against an order in the appellants’ favour for the costs of the appeal. E wished to maintain his opposition to the appeals, but he was not in a position to fund the legal representation that he required himself. The result of the predicament in which he found himself was that he had been left with no alternative but to apply to the court for a protective costs order.
It was clear that E would not have made that application had he not been forced to do so by the Legal Services Commission. It was also clear that without the support of public funding he would not be able, as he wished to do, to continue to resist the appeal. It was essential that there should be representation for both sides before the Supreme Court. The case raised issues of considerable public importance, and it was plainly in the public interest that both sides of the argument should be properly presented. So the real issue that had to be addressed was not whether the case was suitable for a protective costs order, but whether the decision of the Legal Services Commission to refuse funding unless it had the benefit of a protective costs order was compatible with its own Funding Code (made under section 8 of the Access to Justice Act 1999) and open to attack on traditional Wednesbury grounds: see Associated Provincial Picture Houses Ltd v Wednesbury Corpn  1 KB 223.
It should be understood, as a principle of general application, that if the Legal Services Commission decided to fund a litigant whether by way of claim or a defence who was successful in his cause, that decision should ordinarily be seen to carry with it something close to an assurance that the Commission would continue to support him in any subsequent appeal by the unsuccessful party whilst he remained financially eligible. That would particularly be so where (a) the withdrawal of support would expose the publicly funded litigant to a substantial risk for future costs, (b) he retained a significant interest, quite apart from his interest in resisting any future costs liability, in maintaining his success in the litigation and (c) the issues raised on the appeal were of general public importance which it was in the public interest to resolve and his case on those issues was unlikely to be properly argued unless he continued to be funded by the Legal Services Commission. All three of those circumstances prevailed in the instant case. The decision to refuse public funding at the current stage appeared to the court in all the circumstances to be so unreasonable as to be unlawful. E was entitled to an immediate declaration that the only reasonable decision open to the Legal Services Commission was to continue to provide him with public funding for the appeal.
R (E) v Governing Body of JFS and others (No 2)  UKSC 1;  WLR (D) 298
SC: Lord Hope of Craighead, DP, Baroness Hale of Richmond, Lord Brown of Eaton-under-Heywood: 14 October 2009
Appearances: Dinah Rose QC and Helen Mountfield (instructed by Bindmans LLP) for E; Lord Pannick QC and Peter Oldham (instructed by Stone King Sewell LLP) for JFS; Ben Jaffey and Christopher McCrudden (instructed by Farrer & Co) for the United Synagogue; David Hart QC and Sarah Lambert (instructed by Legal Services Commission) for the Legal Services Commission.
Reported by: BL Scully, barrister