England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice Strand London, WC2A 2LL
		17th November 2009

1. MR JUSTICE LANGSTAFF: This appeal, by leave of the single judge, concerns a costs order made at the conclusion of confiscation proceedings on 17th June 2009 by Recorder King at the Croydon Crown Court.
2. There is a long history to the claim for costs by the prosecution which the judge largely, but not entirely, upheld. Briefly it is this. The appellant pleaded guilty on 24th January 2008 to seven offences relating to the distribution of goods with signs or packaging which bore signs identical to or likely to be mistaken for a registered trademark. In essence he was selling counterfeit goods (trainers) from a market stall in Sutton. For that he was sentenced to a term of imprisonment which was then on 11th July 2009 reduced by this court to 8 months' imprisonment instead of the 14 which it had originally been. Because of the nature of the offences the offender was subject to confiscation proceedings. It was those that were determined on 17th June 2009 by an order of the court.
3. Originally the London Borough had estimated that the benefit which the defendant/appellant had from his crimes was in excess of £1 million. Ultimately the benefit was agreed between the parties, after considerable financial investigation and after a process of negotiation in the sum of £25,000. Because the recoverable assets of the appellant exceeded £25,000 the Recorder ordered that a confiscation order in the sum of £25,000 be made to be paid within 2 months with 18 months' imprisonment in default.
4. He then turned to the question of costs. Because the amount of benefit and the position in respect of the recoverable assets had been agreed before him, this was the only live issue for him to determine. What he said was this:

"So far as the application for costs is concerned, it seems to me that there should be some order for costs. I take into account the arguments that have been made in respect of the big difference between what was originally contended and what has eventually been agreed by way of settlement. In those circumstances I am prepared to deduct completely the £2,500 of the financial investigation but feel it is appropriate that you should pay the rest of the costs which amount £12,810."

Accordingly that is what he ordered.

5. Before him there had been a very brief and relatively uninformative schedule of costs. That claimed, not only the £2,500 to which the Recorder made reference, but in addition counsel's fees, a sum in respect of the trading standards investigation and a sum for legal services totalling then £7,560. That was said to be composed of 90 hours charged at £84 per hour. It covered the case preparation and court attendance at both the magistrates and the Crown Court, client conferences, travelling and various administrative matters and telephone calls.
6. It was the submission of Mr Dahlsen, who appears for the appellant today as he did before the Recorder below, that that figure, 90 hours, was simply too high for a claim of this nature.
7. We have to remember what our position is as a court of Criminal Appeal. In R v Northallerton Magistrates' Court ex parte Christopher John Dove [1999] EWHC (Admin) 499, Bingham LJ at paragraph 19 set out the questions of principle which arise for a court such as a Court of Appeal. He was concerned there with a Magistrates' Court hearing but, in our view, the same principles apply to the Crown Court as they do to the Magistrates' Court. The difference is that an appeal on costs in respect of the Magistrates' Court may have to go to the Divisional Court, as ex p Dove concerned, whereas from the Crown Court it can come to us by way of appeal as being part of a sentence appeal. As to that and the principles which apply, we shall say more shortly.
8. In paragraph 19, Bingham LJ (as he was) set out six principles. Two of those principles are relevant to the present appeal. Principle 2 was that an order for costs should never exceed the sum which the prosecutor has actually and reasonably incurred. Here, as Mr Dahlsen says, the prosecutor has actually incurred the costs which are claimed, subject to one small amount to which, again, we shall make reference shortly, but has not reasonably incurred as many as 90 hours in a case of this nature.
9. The fourth principle may be summarised broadly as proportionality. It reads thus:

"While there is no requirement that any sum ordered by justices to be paid to a prosecutor by way of costs should stand in any arithmetical relationship to any fine imposed, the costs ordered to be paid should not in the ordinary way be grossly disproportionately to [in that case a fine]."

The expression of principle continues, essentially spelling out what is now known under the umbrella heading of proportionality.

10. What Mr Dahlsen contends is where costs are incurred, as they were here, they should be proportional to the nature of the hearing. This principle comes into play, as we have noted, in the context of an appeal against sentence. That is the theoretical jurisprudential route by which it reaches this court. It follows that we must look at the judgment of the court below to see whether it is wrong in principle, or whether there is anything manifestly excessive about the order which was made. It is plain that confiscation proceedings necessarily involve considerable expense and the expenditure of time. That is inevitable once it is determined that the criminal concerned is someone who has a criminal life-style. Then the procedure, under the Proceeds of Crime Act 2002 must be undergone. That involves the defendant in a complicated case, as this plainly was in part, despite the relatively small sum that was eventually agreed as benefit, being required to set out the explanation of the money which has, essentially, passed through his accounts, to his benefit. It is complicated in the case of a market trader, as was this, by the fact that many of his receipts would have been in cash.
11. It is inevitable that financial expertise would be called upon and it is inevitable that the prosecutor would have to check the consequence of any financial expertise which is relied on by the defendant.
12. Before us Mr Dahlsen has sought to take us through a schedule of costs which was not before the trial judge. In the light of the appeal, the respondent has appeared and has relied upon on a statement made by Peter Rollins, a senior prosecution lawyer in the London Borough of Sutton. He has appended a more detailed schedule of costs to that statement. This breaks down what he did in each of the months which were relevant. It sets out the number of hours and the rate at which he charged those hours.
13. During the course of this procedure he realised that a claim had been made for his services at £84 per hour, for each and every one of the 90 hours he claimed. Because some of those hours had been spent in 2007, when his rate was £77.60 per hour, and in 2008 when it was £79.60 per hour, an adjustment needed to be made. In short the claim was not for costs actually and reasonably incurred because some of the costs had not been. That resulted in a reduction of about £400 to the total schedule.
14. As to the hours that are claimed at the rates that were claimed Mr Dahlsen makes a number of detailed criticisms. He refers, for instance, to the number of hours taken apparently on telephone calls and the like in June, he complains about an excessive number of hours spent perusing correspondence and preparing for two mentions in August 2008 and January 2009. These are essentially points of detail, as it seems to us and not points of principle.
15. We cannot, given the nature of our jurisdiction be concerned with points of detail and principle and it would be a sad day if it were readily to be thought that orders for costs made, as this order was, on the basis of limited information, at the close of proceedings, should be appealed to this court on anything other than a decision which was effectively manifestly excessive, or was wrong in principle.
16. The appellant here takes no point as to principle save that the result was disproportionate, and it was disproportionate, says Mr Dahlsen because it was unreasonable to spend 90 hours doing what was done. But when pressed in argument, ultimately he was driven to a position where he would accept that there had to be costs incurred in respect of the confiscation part of the proceedings. The costs in respect of the original conviction were inevitably rightly incurred and the result would be that he was claiming what in terms of figures he could not place a specific figure on, but sought to argue that the sum of hours spent by Mr Rollins should be reduced by 50 per cent. It seems to us that those arguments were considered by the trial judge. It is plain that the Recorder had before him detailed argument about the costs position. It was unhelpfully, for him, a detailed argument which relied upon inadequate information. It is plain to us that when he disallowed £2,500, which was the total cost of the financial investigation, this could not have been that that was the single element which alone he focussed on as being an inappropriate expense. If so, he would have had to continue to examine the costs occasioned by the financial investigation and alike. It seems plain to us that what he was doing was reflecting the arguments placed before him as to the amount of costs that should be incurred, applying the principles set out by Bingham LJ and coming to a conclusion, which upon the face of it he felt was just, using the fact that a reduction of about £2,500 seemed to him to be right in the circumstances by attributing that deduction to one specific cost which could easily be identified in the limited information that he had.
17. In our view, therefore, he approached this matter correctly in principle, and given the fact that plainly he looked at or was taken to the matters of detail that were available to him, we do not think it is open now to criticise his ruling by reference to more detailed material provided since.
18. We do not think it is obviously out of step with the costs necessarily incurred in an investigation of such as this, and it follows that we are obliged, with grateful thanks to both counsel for their submissions, to reject this appeal. It will therefore be dismissed.
19. SIR ANTHONY MAY: Mr Lewis, I think there needs to be a reduction of £420.
20. MR LEWIS: My Lord yes.
21. SIR ANTHONY MAY: So that the appeal will be allowed but only to the extent of reducing £12,810 to £12,390 if I have done the maths right. Thank you very much.