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The Children and Family Court Advisory and Support Service acted "unlawfully" in withdrawing the option of self-employment from children's guardians, the High Court ruled last week. Many guardians currently have self-employed status.

Delivering judgment in the judicial review application brought by the guardians' representative body, the National Association of Guardians Ad Litem and Reporting Officers, Mr Justice Scott Baker quashed Cafcass's decision of 27 June to offer the guardians only a contract of full salaried employment. Cafcass's offer of employment will stand, but it must re-open consultation and negotiation on self-employment.

The decision followed months of negotiations with the guardians - also including discussions with the Lord Chancellor's Department's project team before Cafcass' inception in April - which led to a "legitimate expectation" of both employed and self-employed options, said the judge.

Children's guardians - formerly guardians ad litem - are the independent voice of children in care and adoption cases, and are appointed by the family courts. Self-employed guardians have been in dispute with Cafcass over proposals to pay them on a graduated, or fixed, fee basis, which Nagalro claims threatens guardians' independence and professional ability to safeguard the best interests of vulnerable children.

Describing Cafcass's decision in June as a "bombshell", Scott Baker said "Cafcass has acted unlawfully in relation to its commitment" to offer both employed and self-employed options. Cafcass's decision was a "complete volte face", added the judge, and rejected Cafcass's submissions that it had no choice but to withdraw the self-employed contract because Nagalro "did not want what was on offer".

Nagalro chairperson Susan Bindman said she was "gratified" by the decision. She added: "As always Nagalro wishes to work with Cafcass in achieving a flexible resolution for all those who wish to provide services to children within the family courts. We hope that we can put an end to litigation and a beginning to co-operation."

The dispute has led to waiting lists for children's cases in parts of England and Wales. Of the 729 self-employed guardians, only 183 have joined Cafcass, with many others refusing to take on any new cases. Meanwhile, a parallel recruitment drive by Cafcass over the summer resulted in 157 new applicants ready to be appointed, pending the outcome of the judicial review.

Cafcass and Nagalro have agreed cases will be allocated to existing employed and self-employed guardians, but where there is no available guardian, then Cafcass will be free to appoint a new guardian.