England and Wales High Court (Administrative Court) Decisions

1. The purpose of the Act was, and was stated to be, to address the fact that the United Kingdom quota was being fished by so-called 'quota hoppers' to the detriment of indigenous British fishing interests. It had the effect that those who did not meet the qualifying criteria were from 31st March 1989 no longer able to fish in United Kingdom waters. It is said this caused them to suffer very large financial losses. They commenced proceedings by way of judicial review, challenging the lawfulness of the new conditions introduced by the Act. They applied for interim orders suspending the operation of the Act and included claims for damages. These judicial review proceedings raised major questions of English constitutional law and Community law.

2. Hearings followed in the Divisional Court, the Court of Appeal and the House of Lords on the application for the interim order. The House of Lords referred the question to the European Court of Justice. During the same period similar proceedings against the United Kingdom had also been commenced in the Court of Justice by the Commission. As a result of two judgments of the Court of Justice and an order of the House of Lords in July 1990, all the relevant provisions of the Act were suspended. Their illegality was financially confirmed by a further judgment of the Court of Justice in July 1992.

3. The way was then left open for the Applicants to pursue their claims for damages. A further judgment of the Court of Justice in March 1996 held that such damages should be recoverable provided that the relevant rules of Community law were intended to confer rights upon individuals, that the breaches were "sufficiently serious", and that there was a direct causal link between the breaches and the damage complained of. It is accepted that the relevant rules of Community law were intended to confer rights on individuals. The present trial has been concerned with whether or not the relevant breaches were "sufficiently serious". The Court of Justice has in a number of cases provided guidance as to what it means by that expression. We have also considered the further question whether the Applicants may recover 'exemplary', that is punitive, damages. On this point too the Court of Justice has laid down criteria which a national court should apply when deciding this question.

4. We have had a hearing lasting between 5 and 6 days, during the course of which extensive documentary evidence has been laid before us and we have received the submissions of counsel on the law and the facts. We have not accepted the Applicants' allegations of bad faith nor have we accepted their submission that they should be entitled in principle to recover exemplary damages. We have however held that the relevant breaches of Community law were sufficiently serious to carry a right to compensatory damages.

5. We have accordingly declared that:

6. The detailed findings which we have made and the reasons which have led us to our conclusions of law are fully set out in the written Judgment of the Court which has been supplied in draft form to the parties, copies of which are available for inspection. An official text of the judgment will be certified and made available in the Crown Office. We direct that no transcript need be made.

7. Mr Vaughan, first of all, may we mention that it is always possible that there are proofreading errors in the drafts which we have provided to the parties. If the parties have noticed any such errors, then we would be grateful if they could be drawn to our attention in writing, and that applies to any of the legal teams involved. We would hope that we could take a view about any such suggested corrections by, at the latest, Monday so that there would not be any delay in our certifying the official text.

8. MR VAUGHAN QC: What we will do is to consult.

9. LORD JUSTICE HOBHOUSE: Do whatever is convenient between you.

10. MR VAUGHAN QC: My Lords, on that basis we ask that the judgment on liability -- on the basis of your Lordships' findings, that the damages to be assessed?

11. LORD JUSTICE HOBHOUSE: We have had preliminary issues which we have tried. As I understand it, the appropriate course is for us to make declarations in the terms of the issues.

12. MR VAUGHAN QC: My Lords, effectively those two declarations establish the liability, subject to causation and damages.

13. LORD JUSTICE HOBHOUSE: There are issues of causation, but can we come to any consequential Orders which are appropriate? The formal Order will contain the declaration which are contained in the judgment and which I have, in fact, read out.

14. MR VAUGHAN QC: My Lord, we would be seeking the issue of causation and damages to be transferred to the Official Referee, under Ord 36, r 3(2).

15. LORD JUSTICE HOBHOUSE: We will see what the consensus is about that and whether that appears to be appropriate.

16. MR VAUGHAN QC: My Lords, turning to the issue of costs, do your Lordships have Bundle B?

17. LORD JUSTICE HOBHOUSE: That is the Orders bundle?

18. MR VAUGHAN QC: Yes, that is the Orders bundle. My Lords, if you all go to Tab 9, which is the most convenient place to start, that is, as it were, when the last Order for costs in which taxation was made.

19. LORD JUSTICE HOBHOUSE: That is October 1991?

20. MR VAUGHAN QC: Yes. If you look at the bottom of page 57 and the top of page 58 that, effectively, ordered:

21. That covered all the proceedings up to that stage and, effectively, were the injunction proceedings.

22. MR JUSTICE COLLINS: Were you then appearing for the O'Connors as well?

23. MR VAUGHAN QC: I think the O'Connors were not parties at that stage. They were joined later.

24. LORD JUSTICE HOBHOUSE: But maybe some of their companies were. We have immediately following that a long lists of companies which may include some O'Connor companies.

25. MR VAUGHAN QC: The Detect company -- I have always acted for Mr O'Connor's management company. It is one of my three management companies I have appeared for.

26. LORD JUSTICE HOBHOUSE: Anyway, that covered costs to that date?

27. MR VAUGHAN QC: That covered costs to that date to be taxed and those were paid. Effectively, the position now is that we have resolved the damages, the liability issue for damages. That involved various Orders. The Order at Tab 10 was the Order for ----

28. LORD JUSTICE HOBHOUSE: There have been a whole sequence of hearings. What sort of Orders were made on them?

29. MR VAUGHAN QC: My Lords, most of them were costs in the cause or costs reserved.

30. LORD JUSTICE HOBHOUSE: Insofar as costs were reserved, we may have to deal with them. In which ones were the costs reserved?

31. MR JUSTICE COLLINS: The one at Tab 10 appears to have been.

32. MR VAUGHAN QC: Tab 11 was an Order for reference to be reserved. That was the Order for reference to the European Court. When it came back from Luxembourg, there were various amendments made. On page 113: Costs in the cause.

33. LORD JUSTICE HOBHOUSE: That is Tab 12. If it was costs in the cause we do not have to say anything about it?

34. MR VAUGHAN QC: Save that we will be saying that this is the cause, that the liability on damages is the cause. Page 116, which was the making of the Zwartveld Order, was costs in the cause.

35. MR JUSTICE COLLINS: Did anything come of that in the end?

36. MR VAUGHAN QC: Yes, many volumes from the Commissioners and the documents from counsel.

37. MR JUSTICE COLLINS: Was anything relevant?

38. MR VAUGHAN QC: Yes, there were. There were various Commissioners observations disclosed, telling us what the position of the Commissioners was and the matters to which we were parties. Also some statements about what the Commissioners told the United Kingdom Government came from those documents.

39. The final Order is costs in the cause at page 123. The privilege document application is not in this bundle, but an Order has been made on that, as your Lordships know.

40. What we would contend is that one looks at the Order that was made on the preliminary issue. First of all, the Order that was made on the reference was to decide the precondition to liability. That is what led to Factortame (3). The Order that led to the trying of these particular issues is set out on page 113, where costs were in the cause. In our submission, this is the cause.

41. MR JUSTICE COLLINS: It is a pity that no one made clear to me what the cause was, because it is not of the cause in one view.

42. MR VAUGHAN QC: In one view it is part of the cause, but it is rather like a separated action with the problem of liability of separate amounts in quantum, where the liability is taken to be in the cause.

43. MR JUSTICE MOSES: Certainly, in those sort of cases causation is usually part of the liability.

44. MR VAUGHAN QC: But also causation is part of damages in that particular case.

45. LORD JUSTICE HOBHOUSE: We will have to see how far down the road we can go. The view we take about it at this stage will not necessarily exclude you from making an application at a later stage.

46. MR VAUGHAN QC: My Lords, there is also the question of the hearing before the European Court, which is in Bundle C, Tab 8. The Order for costs, which is a fairly standard Order, namely that the standard Order may not be, as it were ----

47. MR JUSTICE COLLINS: It is a standard Order; is it not?

48. MR VAUGHAN QC: It is the standard Order, that the Governments, including the United Kingdom, are not to apply for their costs:

49. LORD JUSTICE HOBHOUSE: Where do I find that?

50. MR VAUGHAN QC: My Lord, it is paragraph 101 at page I-1161. The Respondent appeared there as the Government and, therefore, was not entitled to costs. However, there is the question of our costs which are a matter for the national court being a step in the proceedings.

51. LORD JUSTICE HOBHOUSE: To what extent have you already recovered your costs of the Factortame proceedings? You have recovered them in respect of Factortame (1), but not in respect of Factortame (2) and Factortame (3).

52. LORD JUSTICE HOBHOUSE: You have recovered Factortame (2) as well?

53. MR VAUGHAN QC: Yes. My Lords, we will be saying that, insofar as it is relevant, those Orders, where the cause has been the triggering factor, that the cause now has been decided. Certainly that is so from the preliminary point question. We would say that before, as well, that the issue that went to the European Court, where the costs were reserved on that occasion was liability. It was not causation or damage.

54. My Lords, we also apply for the costs to be taxed forthwith as in the previous case. First of all, we are at the end of the issue of liability at this stage. That is Ord 62, r 8(1). If we are not at the end of that cause, we apply still for that Order. Your Lordships have a discretion under Ord. 62, r 8(2).

55. The reasons we apply, in particular, are, first of all, that was the basis upon which it was done before. One took on a stage where issues had been resolved between parties on the basis of the references that had been made and the court was able to make a final position on those. It is exactly the same position on liability. The court has been able to make a final decision, subject to the causation and quantum.

56. The other basis or additional basis is that we have now been, six years now, as it were, without any Order for costs. We fought for the first year between 1989 to 1991, we got our Order for costs to be taxed forthwith. At this stage we have fought for six years now without any effective Order with any effect to payment for costs in that respect. Clearly, everyone accepts that a major damage suffered as a result of this matter and, indeed, becomes particularly difficult in a situation, such as this, in order to deal with these matters without any payment or Order for costs at all, as one goes along in an action which now has taken virtually eight years so far.

57. LORD JUSTICE HOBHOUSE: We followed the point.

58. MR VAUGHAN QC: My Lords, so basically my application is that from October 1991 we are entitled to our costs. All matters are to be taxed and paid forthwith.

59. My Lords, subject to an application by Miss Frazer on the very same basis of the Order that was made in 1991, that is my application.

60. LORD JUSTICE HOBHOUSE: You want a certificate that is fit for three counsel; is that right?

61. MR VAUGHAN QC: My Lord, Miss Frazer wants to apply, yes.

62. LORD JUSTICE HOBHOUSE: I am not sure, because I always wonder whether it is not you that want the certificate. ( Laughter in the Court .) However, the custom is that she should apply for it, so we will let her apply for it, but I do not think she needs to develop the point very fully.

63. MISS FRAZER: My Lords, as you are aware, it is not a case where it is necessary to apply for a certificate of counsel under the Rules, but I would be grateful if you would grant it in the interests of caution.

64. LORD JUSTICE HOBHOUSE: Mr Forwood, do you want to add anything.

65. MR FORWOOD QC: My Lords, I merely ask your Lordships to make the declarations in the form that your Lordships have suggested. I do suggest that subject to anything that my learned friend, the Solicitor General, says, there is no reason now why your Lordship should not proceed to give judgment on the issue of liability, in particular, having regard to the fact that your Lordships are aware of the specific position of my client. He was excluded from fishing ----

66. LORD JUSTICE HOBHOUSE: We cannot give a judgment for damages to be assessed, because that is only appropriate where there is no substantial issue about causation, and there may be an issue about causation, but it is only a matter of form. You, presumably, are joining in the application. We shall give some directions today which will enable the next stage to be proceeded with as soon as it can.

67. MR FORWOOD QC: My Lords, I am, yes. Our submission is that the matter should now be dealt with as if, in effect, there had been a decision on the issue of liability ----

68. LORD JUSTICE HOBHOUSE: We will hear what other people have to say about it. You ask for costs on the same basis as Mr Vaughan?

69. MR FORWOOD QC: My Lords, yes, to be taxed forthwith.

70. LORD JUSTICE HOBHOUSE: When did you join the action, actually?

71. MR FORWOOD QC: My Lord, I joined the action, I think, within about a week of it starting or two weeks of it starting, I think, in January of 1989.

72. LORD JUSTICE HOBHOUSE: So your start date, for present purposes, is October 1991 as well.

73. MR FORWOOD QC: Yes, my Lord. Indeed, at the outset, having regard to my clients' distinctive position, that they were given leave to be separately represented.

74. LORD JUSTICE HOBHOUSE: So it is a separate representation that was the development, and not their joining in?

75. MR GREEN: My Lords, I simply adopt the submissions already made. My start date was the Order for reference.

76. LORD JUSTICE HOBHOUSE: I beg your pardon.

77. MR GREEN: My Lord, my start date was an application for joinder made at the same time as an application for reference in October 1992. That was the start date for the 85th-97th Applicants.

78. THE SOLICITOR GENERAL: My Lords, first of all, may I apologise on behalf of Mr Richards for not being here. He has, in fact, gone to Spain for his holiday.

79. My Lords, may I make a point in relation to the oral judgment that your Lordship delivered. Your Lordship said at the second paragraph of the judgment:

80. My recollection of the hearing was that there was no debate or any evidence given in relation to that, though I accept that I would not take a point about whether or not it had got over the threshold. I was not intending, my Lords, to make any concession whatsoever as to what losses had been caused in relation to that. Although I have not been able to go through it as fully as I would like, I can find no reference in the detailed judgment to the question of "very large financial losses". The only reference that I could find to the question of losses is a reference in relation to two companies, and they went to receivership without reference to causation.

81. LORD JUSTICE HOBHOUSE: This is not the formal judgment. We will get an opportunity to revise this transcript and I will reconsider that statement. It would certainly not be objectionable if one was to add: "It is said that this..."

82. THE SOLICITOR GENERAL: Indeed, there would be no objection to that, whatsoever.

83. LORD JUSTICE HOBHOUSE: We only got to the size of the damages rather obliquely in the exemplary damages point.

84. THE SOLICITOR GENERAL: Indeed, there was reference to it. Looking through your exemplary damages judgment, you do not refer to the size of the compensatory damages.

85. MR JUSTICE COLLINS: Deliberately.

86. THE SOLICITOR GENERAL: My Lords, that is why I raised the matter.

87. LORD JUSTICE HOBHOUSE: We have that point, yes.

88. THE SOLICITOR GENERAL: Secondly, I agree with your Lordships that the appropriate Order to make in relation to the substance of what has happened is the declarations, in the form set out at page 3 of your Lordships' short oral judgment.

89. LORD JUSTICE HOBHOUSE: That is in precisely the same terms as in the main judgment.

90. THE SOLICITOR GENERAL: Thirdly, my Lord, as a matter of form, in my respectful submission, it does not resolve the question of liability, because the Factortame (3) judgment, in effect, identifies three elements required: (i) intent to create rights for an individual; (ii) sufficiently serious; (iii) causation of loss. So the third element, the first having been conceded, the second having now been found, has yet to be established. In those circumstances, in my respectful submission, all that can be done is the declarations made.

91. As far as questions of costs are concerned, in my respectful submission the appropriate Order to make as to costs is that an Order for costs be made against the Respondent now in relation to the preparation for and the hearing of the resolution of those issues.

92. MR JUSTICE COLLINS: Effectively, the summons before me, thereafter in these proceedings.

93. THE SOLICITOR GENERAL: That is correct, subject to one caveat: the Government has won on the issue of exemplary damages which was fully argued. It would be inconvenient to make two separate Orders in relation to it. The most sensible course, I would respectfully submit, is that the amount of costs that the Applicants get against the Respondent should be reduced by an appropriate percentage. I would respectfully submit that the appropriate percentage is 20 per cent. Therefore, the Order that Lordships make in relation to costs is that the Respondent pay 80 per cent of the costs of and relating to the resolution of these two issues, starting from the time of the summons.

94. MR JUSTICE MOSES: What about all the factual issues about which we had a lot of written submissions, but, in the end, in relation to a large amount of them, may have proved unnecessary, and were relied upon to try to demonstrate the Government's bad faith and they failed. 20 per cent, without going into the mathematics of it, includes any allowance for that.

95. THE SOLICITOR GENERAL: If your Lordships took the view that there was a serious failure on the part of Applicants to make out large parts of their case which were unnecessary, then I would respectfully submit that in your Lordship's discretion you should reduce the amount of the percentage of the costs that they get further.

96. It is perfectly plain from the way that the judgment turned out that a very large part of the material placed before your Lordships by the Applicants was something that was never looked at, because it was really a matter of principle rather than a matter of factual detail. Moreover, it was a debate that the Respondent only got dragged into in order to preserve its position from allegations being subsequently said that they had not dealt with the particular point.

97. My Lords, I obviously leave that to your Lordships to form a view in relation to that issue, but 20 per cent to which I referred is only is in relation to the question of exemplary damages and also a further reduction in relation to those issues in relation to facts.

98. My Lords, I would respectfully submit that the Order that your Lordships make in relation to costs should be the normal Order. It should not, therefore, be forthwith, because we are, in effect, in the middle of a piece of litigation. There is no reason, particularly in an application of this sort which raises genuinely difficult issues, where also much of the time that was taken in preparation for trial of those issues has been brought about by focusing on factual matters that need never have been raised. The matter could have been brought to a head much more quickly, perhaps, than it was.

99. Those are my submissions.

100. LORD JUSTICE HOBHOUSE: Do you have anything to say about the costs of Factortame (3)?

101. THE SOLICITOR GENERAL: In relation to the European Court? My Lords, the position is this: if we are able to establish that no loss was caused, then, in our respectful submission, this should mean that we should not have to pay the costs of Factortame (3). Because that would mean that the whole claim for damages had failed.

102. MR JUSTICE COLLINS: That is a slightly artificial way of looking at it, is it not, because it only went to Factortame (3) because of the contention that there was no bases upon which liability could be incurred, and that was the issue that was fought out and on which they were?

103. THE SOLICITOR GENERAL: But if the position was that the whole claim is misconceived because there is no damage at the end of the day, then they should not have started it.

104. LORD JUSTICE HOBHOUSE: Then you should have thought about that issue. This is the trouble about preliminary issues.

105. THE SOLICITOR GENERAL: It is not a thing that can be resolved in relation to the European Court without there being, in effect, preliminary issues because the European Court will often decide these sort matters.

106. LORD JUSTICE HOBHOUSE: What about the costs which were reserved to earlier dates?

107. THE SOLICITOR GENERAL: In relation to the costs that were reserved, those costs reserved relate to the general conduct of the action and are either reserved or are costs in the cause. In my respectful submission, they should be dealt with at the end.

108. MR JUSTICE COLLINS: That, you say, is the true cause, i.e at the end of it? I should really have made a different Order in relation to costs in cause or made it clear that the cause was the resolution of the issue I directed.

109. THE SOLICITOR GENERAL: My Lord, you made precisely the right Order. You identified what the cause was. My Lords, those are my submissions in relation to costs, unless there is any particular point I have not dealt with in relation to costs.

110. My Lords, may I deal with two further matters that are not to do with costs?

111. THE SOLICITOR GENERAL: First of all, what your Lordships have done is to make, or refuse to make, an Order in judicial review proceedings. The consequence of that would appear to be that leave to appeal is required ----

112. MR JUSTICE COLLINS: I had this before me, actually about two weeks ago. I think the decision that Mr Richards and I reached between us was that the matter was not clear, that we ought to assume that leave might be required and, therefore, give it or not give it on that basis.

113. LORD JUSTICE HOBHOUSE: You have asked for leave to appeal if you need it and we will find out whether that application is opposed. Is there any other application?

114. THE SOLICITOR GENERAL: My Lord, the only application I have not commented upon is the further conduct of the matter. I did not know that a suggestion was going to be made for the matter to be dealt with by the Official Referee. My initial reaction, without having discussed it, is that that would not seem particularly appropriate. I would submit that the sensible course is that the parties discuss the matter, seek to agree amongst themselves what further directions are required for the further conduct of the matter? If the matter goes to the Official Referee, then the only Order that your Lordships, I think, with respect can make, is that it then be transferred to the Official Referee. If the matter stays in this court, then it would be appropriate for your Lordships to make some slightly more detailed Orders, I anticipate, in relation to the further conduct of the matter.

115. LORD JUSTICE HOBHOUSE: Also, I think it is clear that it ought to go to the single-judge court. As things have worked out, it has turned out to be very convenient to have a three-judge court on this occasion, but on damages, particular where findings of fact have to be made, it is much more appropriate to have it before a single judge.

116. THE SOLICITOR GENERAL: That seems to me to be plainly right. Whether it should be the Official Referee or whether it should be a member of the Queen's Bench Division .....

117. LORD JUSTICE HOBHOUSE: We will see. Obviously it will not be well received by the Applicant if this is going to lead to a delay in proceeding onto the next stage. There may also be a question of whether or not you decide to appeal, which may affect whether or not the next stage will go ahead.

118. THE SOLICITOR GENERAL: My Lords, I think the position in relation to that is that we would have 28 days. I am not sure or know what the position is about the effect of an Order, but in the light of assuming that your Lordships were minded to form a view of the declarations that your Lordship referred to in his written statement as to what is to be done, that Order could be drawn up, in effect, today or tomorrow and the 28 days will run during the period of August. During the period of August it would not be practical to proceed with the matter before the Official Referee. The question of where it should go can be dealt with during the course of August.

119. MR VAUGHAN QC: My Lords, on the question of costs we would say that all the issues that have happened since the October date are designed to go to liability. That was the issue that went to the European Court; that was the basis of the dispute between the parties; and that is the basis upon which the preliminary issue was being dealt with and had been ordered, and this matter has been contested. We would say that the costs Order ought to cover all these matters.

120. The causation, although not accepted at this stage, it seems that on causation there is probably no issue at all as between the parties.

121. LORD JUSTICE HOBHOUSE: I think there are some indications that there might be issues. It depends upon an examination of the particular position of your various clients. Of course, the question of causation would have been more acute if we had distinguished between, for example, residence and domicile. That we have not done.

122. MR VAUGHAN QC: The causation issue that now arises will be particular to each Applicant company. That obviously is tied very closely to the whole question of damages and is not a question of going to liability. That cannot (?) be causation at all, in our submission. Our submission is that we should be entitled to all our costs as from the October date up to the present date and not to try and distinguish ours. It is wholly unrealistic, looking at the question of going to the European Court and the basis upon the argument and the nature of the argument, and the basis upon which the European Court ruled, to say that this issue covers both issues. Of course, in passing, they had to deal with those issues in order to deal with the whole of the liability. They had to deal with causation, and in that respect it is the third criteria. That really is a matter of completeness, not that anyone would raise any particular arguments between anyone as to whether there might have been any different meaning as to causation.

123. Therefore, we say that we should be entitled to the costs of all those matters, or if we are not entitled to them, use your discretion to deal with that. For the same reasons we would say that the Order should be taxed and paid forthwith in this particular respect. The issues which were raised either before the single judge or before the Official Referee are wholly distinct and wholly different from anything that would be decided by your Lordships - indeed, wholly distinct when decided by the European Court back then.

124. MR JUSTICE COLLINS: Is the extensive discovery of any materiality to the causation or quantum issue or was it purely for these proceedings?

125. MR VAUGHAN QC: Just for these proceedings.

126. LORD JUSTICE HOBHOUSE: It was the discovery which was provided by the client, was it not? It was discovery which you were on the receiving side off ----

127. MR VAUGHAN QC: We were on the receiving side when we got these vast documents -- quite correctly -- because these were the issues. We were given something like 55 volumes which were whittled down ----

128. LORD JUSTICE HOBHOUSE: It was what you asked for.

129. MR VAUGHAN QC: These were relevant; these were produced. We asked for the relevant documentation and this is what we received.

130. MR JUSTICE COLLINS: So the massive documentation which we referred to was all in connection with these proceedings?

131. MR VAUGHAN QC: All within these proceedings in vast amounts. What you eventually received was the documents which were referred to in the skeleton of either side.

132. With regard to the point that there were a lot of things that he we did not have to deal with ----

133. MR JUSTICE COLLINS: Mr Vaughan, in that case there is very little, is there not, in way of costs which were attached to the next stage. The very highest position of costs incurred since October 1991 have been incurred in relation to these proceedings.

134. MR VAUGHAN QC: The whole lot has -----

135. MR JUSTICE COLLINS: When I say these proceedings before us, there is very little part that relates to quantum and/or causation.

136. MR VAUGHAN QC: There is no costs at all up to now on those issues, except for that -----

137. MR JUSTICE COLLINS: Then you are arguing about nothing, because if we divided out, as the Solicitor General suggests, you will, effectively, get all your costs after October 1991 in whatever proportion we think right.

138. MR VAUGHAN QC: But he divides out Factortame (3).

139. MR JUSTICE COLLINS: Forgetting about for the moment, other than that dividing out, you are really arguing about nothing.

140. MR VAUGHAN QC: About that, yes, but it is the Factortame (3) part which is the very significant part of the costs.

141. With regards to the reducing by an appropriate percentage the damages point, our calculation is that exemplary damages took not more than half-a-day in these matters. I will leave that to Mr Forwood to deal with.

142. MR JUSTICE COLLINS: It is not only exemplary damages, Mr Vaughan, it is the aspect of trying to establish bad faith.

143. MR VAUGHAN QC: Obviously, one does not know what is the basis upon which the documents were there, and we made submissions on the basis of the documents. Your Lordships did not find that in our favour, but, in our respectful submission, it did not extend the time; it was just another issue in the question of liability in this particular matter. Even if one did not establish bad faith, we established quite a number of matters, such as the domicile matter, which obviously took quite a long time, which, even if we did not establish bad faith, established a fairly important part of your Lordships' judgment.

144. With regards the other documents, first of all, as regards to the Common Fisheries Policy, everyone regarded it as important that the Common Fisheries Policy should be before your Lordships. Both sides agreed. Indeed, the bundles were agreed bundles. If one wants to go back in history, the Government were wanting more and more regulations in the Bundle G than we wanted. A lot of them in the bundle were increased because the Government wanted to put in more documents into that bundle.

145. As regards the quota point, this Order arose and became particularly important because the Government withdrew its concession. Up to the stage of the skeletons, indeed up to the very late stage, that was conceded, that they had contributed to the discussion and conceded in the defence. That became a relevant issue when they withdrew that concession and at that point producing these very large number of extra bundles, 15 or 20 volumes, which your Lordships had to deal with.

146. We would say that the extra documents were potential evidence. Your Lordships decided this matter in a particular way, but it was always possible that your Lordships may have wanted to go (and it was always accepted by everybody) into the background in much more detail in that respect. We would say that there should be no reduction at all for that part of these matters. It has not added to the costs. These were documents that were wanted and my learned friend did not asked for costs on this basis originally.

147. We would say that on the issue of exemplary damages, it always should be dealt with as one issue. If you are to reduce, we would say that it is a much less proportion than that advanced by my learned friend, the Solicitor General. I leave the quantum, as it were, to Mr Forwood, who was on his feet.

148. On the leave to appeal point, we do not oppose leave to appeal. Clearly, it is an enormously important point on these matters. However, we would say that we would be making an application for expedition, not that we can make it to your Lordships but to the Court of Appeal, because fairly it has taken now eight years for this matter to get to this stage ----

149. LORD JUSTICE HOBHOUSE: That is an application that should be made to the Court of Appeal. They will deal with it if a decision is made to appeal, which would have to be made during the course of the vacation anyway.

150. MR VAUGHAN QC: Yes, but I thought I had better indicate to your Lordships that we would be doing that if leave to appeal is sought.

151. With regard to the future conduct of the matter, we would ask that the matter be here and now transferred to the Official Referee. Quite often in these type of cases one starts with the question of damages and it is better to have it under the supervision of somebody who would try this matter. Our respectful submission is that it is much better for the Official Referee to try this matter, somebody who is, as it were, used to trying these long schedules and long expert accountancy reports on particular companies and everything like it, and who is better equipped in many ways to deal with these long schedules and long matters relating to some -- I do not know what it is -- 97 Applicants and, however, many ----

152. MR JUSTICE COLLINS: When did you notify the other side that you were going to apply for this?

153. MR VAUGHAN QC: When we applied, when we got to our feet.

154. MR JUSTICE COLLINS: Do you mean this afternoon?

155. LORD JUSTICE HOBHOUSE: It may be that this would merit further discussion between the parties and it may well be that you could reach some agreement as to this course. Is there anything else that you want to say, Mr Vaughan?

156. MR VAUGHAN QC: My Lord, I think I have covered it.

157. LORD JUSTICE HOBHOUSE: Mr Forwood, do you want to say anything more? It is really only costs that you need add anything on, is it not?

158. MR FORWOOD QC: My Lord, so far as the costs up and until the beginning of the hearing before your Lordships is concerned, my first submission is there was no way in which the costs were increased by the exemplary damages issue or, indeed, by the issues of assessing that charaterisation of the United Kingdom's conduct. The documents produced were exactly the same and, in our submission, no increase in costs has occurred by reason of what happened up until then.

159. My Lords, so far as the actual time spent in discussing the issue before your Lordships are concerned, my estimate would be, between my learned friend (the Solicitor General) and myself, probably the right side of less than a day in total, bearing in mind that a significant part of the time was actually looking at the documents not merely for purposes of assessing any Order of exemplary damages, but also the question of assessing the charaterisation of the state of the mind of the Government for purposes of determining whether this was a sufficiently serious breach.

160. My Lords, so far as that is concerned, your Lordships have sought to characterise it as a bad faith argument. I do think that in my pleadings I put it as a bad faith argument. The argument that I was essentially advancing in my pleadings -- your Lordship will recall that I referred to the particular supplementary particulars that I was served -- was that there had been insufficient investigation of the consequences of a nationality condition alone. It was in that context that we spent some time, and I took your Lordships through the question of the way in which that matter had been presented to counsel. That was an issue which goes just as much to the core issue of liability as to an issue of exemplary damages, so one had to deal with it in any event.

161. More generally, my Lords, I would suggest that we are, essentially, in a situation in which there has been a trial in substance, if not in form, on liability. The Applicants have, in effect, succeeded in that trial and, in accordance with the ordinary practice, it is not normally appropriate to make an Order for costs that seeks to identify within the overall framework, on which issues of fact or argument, that one side has been more successful than the other. Overall we have succeeded on the issue of liability.

162. It might well have been that your Lordships felt it necessary to go into more detail in analysing the precise attitudes of the officials throughout. In the event, your Lordships did not. Be that as it may, this is just one aspect of the many ways in which the issue of liability might have been approached.

163. In our submission, there are no reasons to depart from the normal rule, which is that liability has to be looked at overall and on that basis we have succeeded.

164. THE SOLICITOR GENERAL: My Lords, I am sorry to get to my feet, but may I just deal with three matters? First of all, Mr Vaughan's suggestion -- I apologise.

165. LORD JUSTICE HOBHOUSE: I think it would be helpful if we heard Mr Green first. Mr Green, did you want to add anything?

166. MR GREEN: My Lords, there is one other matter which I should have mentioned, which is that I would be seeking legal aid taxation. I do not know if I need to address your Lordships on any particular issue arising out of the allegation of bad faith or whether your Lordships had in mind simply points which -----.

167. LORD JUSTICE HOBHOUSE: We were not going to draw any distinctions between the various Applicants. That is not our present state of mind. You are welcome to persuade us that we should treat your client more adversely, I do not know.

168. MR GREEN: My Lords, I was simply saying that I do not know whether your Lordships had in mind any particular aspect which related to my client. Your Lordships do not, and I do not need to address you on that. The only thing I need mention is the legal aid taxation.

169. LORD JUSTICE HOBHOUSE: You may have your legal aid taxation.

170. MR GREEN: My Lords, I think it is a point of mathematics, that when my learned friend says 20 per cent, it is 20 per cent of Mr Forwood's time, because neither I or Mr Vaughan devoted any time to ----

171. LORD JUSTICE HOBHOUSE: I think, again, if we are looking at the position overall, we have to asses it overall. It would be quite wrong to apportion the question of costs as between different counsel who shouldered different parts of the burden, which was all in the common cause.

172. Mr Solicitor, what did you want to add?

173. THE SOLICITOR GENERAL: The things that excited me to get to my feet, my Lords, is that Mr Vaughan, in an attempt to try and unload some of the responsibility for the huge amount of unread documentation in the case, said that we suggested that some more regulatory material from the Community be put in. That is absolutely correct. That constituted Bundle G2 and, in my respectful submission, it was appropriate for that to go in.

174. The vast amount of documentation which, as it were, bedevilled this case was the discovery that we made in relation to the issue of whether there was some covert issue not revealed when we made the public announcement as to what was happening in relation to introduction (?) of the Act. So I respectfully submit that the suggestion that we are responsible for that is quite wrong(?).

175. The second point is that my Lord, Collins J's, point is correct. There has, in effect, been no work done by either side on the causation issue, save to the extent that it could be said in hearings in trying to resolve the whole thing. My Lords, Collins J is right to say that there is nothing in it so far as money is concerned, in relation to that aspect.

176. The third issue, which I should have said, is that if your Lordships made a division of the costs because of the exemplary damages, in our respectful submission that same division should apply to the Factortame (3) in European Court of Justice as well, because question number (2) in the European Court of Justice is what is the position in relation to exemplary damages.

177. If, at the end of the day, we have won (which indeed we have won - on exemplary damages) and that is out of the window, then as a matter of rough and sensible justice we should not have to pay the costs of that matter being raised in the European Court of Justice.

178. LORD JUSTICE HOBHOUSE: I do not think really that there is anything more which you need to add, Mr Vaughan, is there?

179. MR VAUGHAN QC: My Lords, about the documents, there is a difference of opinion.

180. LORD JUSTICE HOBHOUSE: We are obviously not going to start weighing bundles. I think we have your general points on that.

181. MR VAUGHAN QC: With regards to exemplary damages on Factortame (3), first of all we are not of that certificate.

182. LORD JUSTICE HOBHOUSE: I do not think that is his best point. We will rise for a moment.

183. LORD JUSTICE HOBHOUSE: Firstly, I correct the oral comments that I made when introducing our written judgment so as to amend the sentence: "This caused them to suffer very large financial losses."-- so as to read:

184. The Orders that we make today will be in the form of the declarations which have previously been announced. We grant all parties leave to appeal to the Court of Appeal, should they so require it. We grant an Order for legal aid taxation to Mr Green and those representing his clients. We should place on record at this stage that, if this matter goes further, then it should be reconsidered whether or not separate representation is required for all the Applicants. It may well be that if this matter does go on an appeal to another court it will be appropriate for all the Applicants to be represented by certainly the same barristers. On the question of costs still, Mr Vaughan's clients shall have a certificate of fitness for three counsel.

185. Coming to the question of costs, we consider that we should make an Order in respect of all the costs which have been incurred since 2nd October 1991, and that we should make an Order for taxation and payment forthwith. It is an Order in favour of the Applicants against Respondent. We qualify that Order by saying that in respect of the costs of this hearing, including the costs of the preparation of the various skeleton arguments which have been submitted, the Applicants should recover only 80 per cent of their costs.

186. The reasons why we make those Orders for costs are as follows. The stage of the proceedings which has run from October 1991 down to the present day represents a discrete section of the proceedings and it is appropriate, in our judgment, that we should make at this stage an Order as to the costs of that stage. Furthermore, it is a stage which has resulted in substantial success for these Applicants.

187. The costs that have been reserved are included in the costs Order which we make, as are the Orders that were stated to be costs in cause. Similarly, we have included in our Order the costs of the proceedings before the Court of Justice which have been referred to as Factortame (No.3). These were proceedings in which the Applicants were successful and we see no reason why the Applicants should not recover in full the costs of that part of the proceedings.

188. As regards to the limited reduction in the recoverable costs which we have made, they relate to the final part of this proceeding. At this hearing we have had to consider not only the question of whether the breaches were sufficiently serious, but also the question of exemplary damages and the allegations, which were, effectively, allegations of bad faith, which were made against the Respondent. We consider that in view of the facts that we have resolved both the exemplary damages and the good faith issues in favour of the Respondent, some reduction in the costs recoverable by the Applicants is appropriate. As stated, we consider the reduction should be 20 per cent. It is difficult to distinguish between costs of preparation and the costs of the hearing itself, and that is why we have made an Order which relates to the costs of the hearing and the costs of the skeleton arguments.

189. The same effectual order could have been made and expressed in different words, but we think that that is the convenient and efficient way in which to make that Order. There is a general Order in favour of the Applicants to cover the period since 2nd October 1991, but it is subject to the reduction which I have stated and which I have explained.

190. As regards what should happen next, we consider that it is inappropriate at this hearing to make directions as to how the remaining disputes should be tried. It may be that there is scope for agreement on some of the potential disputes. It is also to be hoped that there is scope for agreement as to the procedure to be followed in resolving such disputes as remain. We consider that it would be best that that should be discussed between the various legal teams with a view to resolving as many of the differences, either of substance or procedure, between themselves.

191. We give general liberty to apply for directions for the further progress of this matter. We direct that any such application (which may be made during the long vacation, if appropriate) should be made either to Collins J or Moses J, as seems appropriate; so it will it be dealt with by a single judge of the Divisional Court.

192. Are there any other matters which anybody wants to us deal with?

193. THE SOLICITOR GENERAL: My Lords, I should say, on behalf of all the parties and all the counsel, the stunning speed at which the judgment was produced which was so thorough is greatly appreciated by all parties.

194. MR VAUGHAN QC: I say the same too.

195. LORD JUSTICE HOBHOUSE: Thank you very much, indeed. If we may thank everybody for their assistance, without which we would not have been able to achieve what we did.