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.
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.
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.
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.
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.
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.
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?
30. LORD
JUSTICE HOBHOUSE: Insofar as costs were reserved, we may have to deal with
them. In which ones were the costs reserved?
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.
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.
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
----
48. MR
VAUGHAN QC: It is the standard Order, that the Governments, including the
United Kingdom, are not to apply for their costs:
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).
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.
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.
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.
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?
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.
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.
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..."
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.
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.
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.
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.
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.
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.
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?
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 ----
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.
135. MR
JUSTICE COLLINS: When I say these proceedings before us, there is very little
part that relates to quantum and/or causation.
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.
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 ----
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?
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.
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.
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?
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.
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.
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.
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.