England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2A 2LL
		25 July 2008

1. MR JUSTICE CHARLES: I have an application for judicial review by Mr Hiscox. The defendant is the Secretary of State for Work and Pensions. The claim form was issued in early 2007. In his observations on paper when considering whether or not permission should be granted, Langstaff J said this:

"The explanation given in the Acknowledgment of Service that the Liability Order related to the period from 19/7/01 to 28/12/04 and not to any later period, and was thus correctly made, appears to be a complete answer to the claim. If the claimant maintains that notwithstanding this there is a proper basis for continuing his application for permission, he must identify in writing what that is, so that the matter way be further considered. He must do so within two months (ie by no later than 10 July 2007), until then all further proceedings herein are stayed. If he does not do so, then on that date the proceedings shall be treated as if permission to apply for judicial review is refused as at that date."

2. It is quite apparent from those observations that Langstaff J read the claim form as one which was focused upon the liability order that had been obtained, followed up by a charging order as to its enforcement.
3. After some delay which I need not go into at the moment, the response to the order of Langstaff J was served. That response in paragraphs 2, 3 and 4 seeks to address the point that the amount in the liability order was incorrect and does so by reference, in part, to a letter of 19 December 2006. What it does not do is to go back to earlier correspondence and, for example, a letter I have been referred to today of 17 October 2006, a schedule to which included a deduction in respect of payments made directly by Mr Hiscox in the sum of £2,911.50. At that stage on those documents therefore, on the basis I have described, it would appear, although I confess it is not easy to follow the response to the order of Langstaff J, that there was a dispute as to whether or not the amount under the liability order was the correct amount. There are some other matters also raised in the response to the order of Langstaff J.
4. There were issues which I may have to come to in the context of costs concerning the production of that response and issues relating to an unless order. The background to that led to an order by Underhill J. I read the first sentence of his observations where he says:

"I have spent -- I could say wasted -- a good deal of time trying to get to the bottom of this singularly arid dispute, and I attach a note concerning my analysis of what appears to have gone wrong."

5. That he does and that all relates to the response to the order of Langstaff J. His order is dated July 2008, not very long ago, bringing matters to a head. The root cause of the underlying problems and confusion is accepted to be an error in the solicitors' office of the solicitors representing Mr Hiscox. The defendant then produced a further witness statement (having produced one earlier) and relies on the original grounds of defence referred to by Langstaff J in the acknowledgment of service. The upshot of the combination of those documents and the position was made clear to the claimant and his solicitors as it seems to me had been the case from a very early stage in this process, namely that the position of the Secretary of State is and was that the amount in the liability order was correct because it related to a particular period of time. In respect of later periods, there were then a number of reassessments with a number of figures being put forward, so far as I am aware some of which may be correct, some of which may be incorrect. But the Secretary of State's position is that that exercise, albeit potentially annoying to the claimant, adds nothing to the underlying dispute relating to the liability order, and that when finally the reassessments and recalculations had been made, it transpired that the claimant was owed a credit for the later periods. He has been given credit in that sum as against the amount claimed under the liability order for the earlier period. To the uninitiated some of the calculations are not that easy to follow, but that is clearly the overarching result of what is stated.
6. What therefore remains in this judicial review? The central point identified by Langstaff J goes back to the liability order. The actual permission that was given was given by Irwin J in the following terms:

"It is not clear to me on the papers that the defendants have met the fundamental point that there has been a miscalculation, not fully rectified, as to the period of the liability order. This permission is granted for judicial review, with any necessary extension of time."

Again, it is apparent that Irwin J's attention was on the liability order.

7. What is said today on behalf of the claimant relating to the liability order? It is accepted, to my mind correctly on behalf of the claimant, that reassessments after the relevant date can give rise to a number of problems and difficulties and alterations. That is therefore not the point. It seems to me to follow that nothing flows simply from looking at the list of differing figures in correspondence set out in the claim form. What is, however, said is that, as I have mentioned, if you look at the letter of 17 October 2006, that appears to indicate that a sum of £2,911.50 was credited as payments made by Mr Hiscox, and a proper explanation has not been given as to why that sum is not included in later calculations.
8. The first point to be noted is that that point does not arise anywhere in the response document served pursuant to the order of Langstaff J. The next point to note is there is no evidence at all from the claimant positively asserting that the figure of £2,911.50 is in fact right. When I invited his representative to take me through the papers and show how he says the figures produced by the Secretary of State confirming the Secretary of State's position that the figure in the liability order was correct are wrong, that representative was unable to do so, apart from making the point that the Secretary of State had not given an explanation as to the £2,911.50. To my mind, that is simply nowhere near good enough to establish a case that the liability order figure was incorrect.
9. From as early as 2007 the writing has been clearly on the wall so far as this claimant is concerned to put up or shut up so far as the calculation of the figure on which the liability order was based is concerned. As I have indicated, that argument has not been advanced to my mind with any clarity, and it has not been supported by evidence. Therefore, it seems to me that that aspect or the claim, regarded by Irwin J and Langstaff J as the central point, is doomed to failure.
10. Other aspects, so it is said, of the claim relate to a generalised assertion requiring the Secretary of State to produce calculations. That the Secretary of State has now done. To my mind, that would have been done whether or not this review process was in being. It cannot, to my mind, realistically be said that this review acted as a trigger or catalyst to that. No such assertion is actually made in the claim form which also does not assert there was in some way a continuing failure by the Department to do something which it ought to have done. It is now accepted that there was a need for reassessments by reference to, as I understand it, a number of matters concerning the claimant's earnings and other matters which resulted in communication and reassessment. To my mind, the claim form does not properly assert, and there is no evidential basis in any event for a conclusion that, as at the time it was issued, the Secretary of State was in default in providing answers or further assessments so as to warrant a mandatory order being made against the Secretary of State to, as I have put it in respect of the claimant, put up or shut up in the context of how much was actually owed.
11. To my mind, therefore, this claim must be dismissed. In short, the central and fundamental part of it relating to what was due and owing under the liability order is a claim which the claimant has failed to make out so far as the part of it relating to a mandatory order as to the provision of further figures, to my mind, it is not a claim that was in any event adequately advanced in the documentation, and further has not been made out as something that was warranted at the time the claim form was issued, or indeed now. In short, therefore, I dismiss this application.
12. MISS OLLEY: My Lord, I am grateful. I do have an application for costs. I trust that your Lordship might have received the schedule.
13. MR JUSTICE CHARLES: I saw the schedule, yes. What is your application for costs?
14. MISS OLLEY: It is a slightly convoluted one, my Lord. It is in two parts. The first part relates to the costs occasioned by the confusion created by the claimant's solicitors.
15. MR JUSTICE CHARLES: Hang on. I just want to try and find your schedule because I did have it and now I have lost it. Is it in your bundle?
16. MISS OLLEY: No, my Lord, it is not. It had not been finalised by that stage. I will just find another copy for my Lord.
17. MR JUSTICE CHARLES: No, I scribbled on it, that is all. Perhaps you better give me another one because I have lost it. I have found it again.
18. MISS OLLEY: I am grateful, my Lord.
19. MR JUSTICE CHARLES: Yes.
20. MISS OLLEY: So first is an application in any event that the claimant's solicitors personally pay the costs occasioned by the confusion they created which Underhill J has dealt with, and as I indicated in my skeleton I cannot improve upon that.
21. MR JUSTICE CHARLES: Yes, he has done, but how does that satisfy the relevant test? Mr Burrows has written back saying: "Sorry, I accept that it was an administrative error", and what Underhill J says, with some degree of force, is: "If only people would talk to each other on a telephone, they might be able to sort this out".
22. MISS OLLEY: I am far from clear an attempt did not happen --
23. MR JUSTICE CHARLES: It may well have done, but maybe it did not succeed.
24. MISS OLLEY: Of course, all that the defendant can do is to --
25. MR JUSTICE CHARLES: It is a very high test, is it not?
26. MISS OLLEY: It is, my Lord, yes, 48.7 of the CPR -- unreasonable or improper or --
27. MR JUSTICE CHARLES: It is way beyond negligence, is it not?
28. MISS OLLEY: I would suggest it was way beyond negligence and it has occasioned the costs that we have recorded here. I rely on the passages in bold in Underhill J's note, where he explains the missed opportunities for clarification on the parts of the claimant's solicitors.
29. MR JUSTICE CHARLES: Let me have a look.
30. MISS OLLEY: It is quite clear that had it been made clear from the start, it would not have been necessary --
31. MR BURROWS: My Lord, I wonder if helps if I say I ought to pay half of that. I do not know if that helps at all, my Lord.
32. MISS OLLEY: I am grateful for that indication.
33. MR JUSTICE CHARLES: Half of what?
34. MR BURROWS: Half of part 1 of the minute.
35. MR JUSTICE CHARLES: So you are saying half of £3,865?
36. MR BURROWS: Yes, in round terms.
37. MISS OLLEY: I am grateful for that helpful indication. I will take it as an admission that it is an appropriate application in principle.
38. MR BURROWS: It was made as a spirit of the --
39. MR JUSTICE CHARLES: It was just made as an offer; I do not think it was accepting anything at the moment. It was just a deal.
40. MISS OLLEY: I stand corrected.
41. MR JUSTICE CHARLES: Can you help me because what I do not understand from your figures is why acknowledgment of service, instructing counsel, taking instructions from clients and instructing counsel, accompanying bundle is properly within that part of the order at all.
42. MISS OLLEY: Yes, may I take instructions on that just to clarify? (pause)
43. That is accepted. I apologise.
44. MR JUSTICE CHARLES: It must be wrong; it is not in that part.
45. MISS OLLEY: Yes, that is right. Obviously we would claim those costs in any event.
46. MR JUSTICE CHARLES: I think it is up to and including your £3,600 figures. You have to take off £1,620, do you not?
47. MISS OLLEY: Yes. Which is the other figure that your Lordship is not happy with?
48. MR JUSTICE CHARLES: The £900 and £720 seem to me to be -- I see, your second part is instructing (inaudible) regards to the order of -- how is that justifiable?
49. MISS OLLEY: That is part of the costs of today.
50. MR JUSTICE CHARLES: I think that is just part of the costs of today.
51. MISS OLLEY: I agree with your Lordship that that does need to come off. Everything else does look --
52. MR JUSTICE CHARLES: Which is slightly in excess, it is not? So we are taking off £1,620, takes it down to £2,245.
53. MISS OLLEY: Yes, and £1,900 was offered.
54. MR JUSTICE CHARLES: Let us leave the offer on one side at the moment because all Mr Burrows was doing was saying: "Look, I'm taking a commercial view so far as this is concerned". I do not think you can take anything from it at the moment.
55. MISS OLLEY: Now, as regards the costs of the acknowledgment of service, I do ask for those, but just in the usual way that they be --
56. MR JUSTICE CHARLES: I think you are entitled to your costs because you have won as against the claimant. That is the prima facie position subject to -- but it does not seem to me at the moment that you would be entitled to your costs against the claimant.
57. MISS OLLEY: That aspect which should be moved over into the other part of the schedule. Now, my Lord, the other part of my costs application is that, if your Lordship does not agree with what I am about to say, I would ask that it is in any event paid by the claimant on the basis that it is his claim and the defendant has spent public money in responding to it. However, whilst I do not in any way undermine that application, I would suggest, in the particular circumstances, it is perhaps not fair that the claimant himself would have to pay, and I do ask that the claimant's representatives in fact pay the defendant's costs.
58. MR JUSTICE CHARLES: You can ask, but I would just have to adjourn that so that it can be dealt with at a separate hearing, would I not?
59. MISS OLLEY: I understand that in relation to the rest of the costs, ie part 2 and of course including the acknowledgment of service. That would have to go off, but I would ask that, in the alternative, should the court come to the conclusion that the costs should not be paid by the claimant's representatives, they should be paid by the claimant in any event in the normal way.
60. MR JUSTICE CHARLES: That is a matter for you. I think, subject to what Mr Burrows has to say, that would be a matter for you whether or not you would seek to recover them against this claimant.
61. MISS OLLEY: Yes, of course, that is correct.
62. MR JUSTICE CHARLES: Do you know what your position is about recovering them against this claimant?
63. MISS OLLEY: Well, my Lord, previous costs have had to be added to the arrears due, and in fact there are still costs outstanding in respect of the charging order.
64. MR JUSTICE CHARLES: That is not what I asked you. I asked you if you have any instructions as to whether or not the Department would be looking to recover these costs as against Mr Hiscox personally.
65. MISS OLLEY: Yes, my Lord, and that is the basis of the second part of the order. However, in view of the way that the case has been conducted, it is thought appropriate to ask for an order against the claimant's representatives. Obviously if that is agreed to, there will be no question of going against the claimant himself -- of course not because that would be double recovery.
66. MR JUSTICE CHARLES: You have not answered my question yet, as to whether or not -- I understand that you have instructions to seek an order for costs against the claimant personally.
67. MISS OLLEY: Yes.
68. MR JUSTICE CHARLES: And it may be that nobody in the Department has made a decision as to whether or not the Department in the circumstances of this case would ever seek to recover those costs against that individual.
69. MISS OLLEY: Yes, my Lord. Obviously it would depend on the circumstances of each case, but there is no reason in principle why the costs would not be recovered against the claimant, who after all brought the claim and failed. It just so happens in the circumstances of this case the application is primarily --
70. MR JUSTICE CHARLES: Is that the reality of this case?
71. MISS OLLEY: The reality of this case, my Lord --
72. MR JUSTICE CHARLES: You would not be able to add it to your charging order, would you?
73. MISS OLLEY: Whether we may able to satisfy, I suppose, is always a question that is resolved at a later date, but it would not affect the application that was made in principle. My Lord, this was always a nonsensical application, to use a slightly unforensic term.
74. MR JUSTICE CHARLES: It was and it was not. I think the difficulty is when you see the calculations coming out of the bodies who instruct you, they are almost impenetrable to the ordinary human being. There are undoubtedly a series of letters which had different figures in them.
75. MISS OLLEY: My Lord, I personally would probably be inclined to agree with that, but perhaps that just means that I am not very good at maths, but when one looks at the page on 44, I do not actually have --
76. MR JUSTICE CHARLES: I understand at the moment --
77. MISS OLLEY: Just a very quick point --
78. MR JUSTICE CHARLES: What I am really after is whether or not there is any room in this case to avoid court time, public money, the enforcement process to be avoided by essentially a deal being done, which is what Mr Burrows is offering -- in other words, he is saying he will pay X. He may withdraw that offer, but other than that you are going to come back to some other poor judge who is going to have to go through all of this all over again. You are effectively going to have a wasted costs argument against Mr Burrows that is going to take at least half a day, with half a day's reading. The test is very high.
79. MISS OLLEY: That is partly to be answered by Mr Burrows, my Lord, but it does not mean it is not appropriate to make the application.
80. MR JUSTICE CHARLES: I am not suggesting it is, I am just asking whether it would be sensible for you and Mr Burrows, or those who instruct you and Mr Burrows, to have a talk with each other about what the upshot of this is on costs.
81. MISS OLLEY: I am sure that would happen in any event. Whether we actually end up having to come back to court we will obviously take a view on that, and whether it would be worth spending public time and money and the court's time in doing that, but that, in my submission, is a separate question as to whether your Lordship is prepared to make the preliminary order.
82. MR JUSTICE CHARLES: It is, but I am subsuming the issues into one to see whether we can get it sorted out today.
83. MISS OLLEY: I think some notice has been taken of your Lordship's comments, and on that basis we will be content simply to ask for an order for costs in the normal way against the claimant in respect of the matters which are not occasioned by the confusion caused by the claimant's solicitors. So on that basis --
84. MR JUSTICE CHARLES: That is a matter for the claimant and Mr Burrows to sort out then, you say, do you?
85. MISS OLLEY: Yes, the claimant himself, when he sees your Lordship's judgment, might have one or two points to make. That is a matter for him. So I maintain the wasted costs application set out in the first part of the costs schedule. As regards the balance of the costs, I simply ask for an ordinary costs order, if I may put it like that. But obviously that will have to be augmented by the £900 which your Lordship has identified is in the wrong part of the schedule.
86. MR JUSTICE CHARLES: It is £1,620 it comes out at.
87. MISS OLLEY: Yes, so £4,492, I think, for part 2.
88. MR JUSTICE CHARLES: I see.
89. MISS OLLEY: So part 1 is £2,245 and part 2 is £4,492.
90. MR JUSTICE CHARLES: I see.
91. Right, Mr Burrows, what do you have to say?
92. MR BURROWS: My Lord, I stand by my offer to pay -- I prefer to say it was to pay half of the costs of part 1 on the basis that that disposes of any order for costs. There was a failure to talk by either side. There was a failure on my part to get documents that should have been before the court before the court at the right time, and I accept that is my fault, my Lord. I would ask you to say that any order for costs in that part should be against me personally or my firm. One half is what I am saying, my Lord, with no order for costs as to the balance.
93. MR JUSTICE CHARLES: Why no order as to costs?
94. MR BURROWS: Sorry, no further costs -- no costs being inflicted onto Mr Hiscox in any way, that they would be limited as to that part. My Lord, I am in a lot of difficulty on the second part. My Lord made comments during the course of my submissions. It may be that my firm should pay part of the costs of that.
95. MR JUSTICE CHARLES: There is no application against you for that. What is being said is that costs would normally follow the event, therefore the claimant will have to pay and it will be a matter for you and the claimant to sort out, and for the Department to decide whether or not they are going to try and recover costs against your client.
96. MR BURROWS: Yes, my Lord. I can only adopt my Lord's comments on the difficulties of understanding these papers and the ebb and flow that has occurred in this case. I can say no more than that.
97. MR JUSTICE CHARLES: Thank you.
98. MISS OLLEY: If I can just respond to the first part of the schedule. If the half offered now means that what is offered is £1,122.50, I think we will maintain our application for the full £2,245. There is no real basis for reducing it by such a large sum. The fault is entirely due to the claimant's solicitors, and I ask for the full sum on the basis that it is reasonable in view of the time spent.
99. MR JUSTICE CHARLES: Right, thank you.
100. There are three aspects relating to costs. The first is whether or not I should make a wasted costs order against the solicitors pursuant to Underhill J's order. Underhill J produced an extremely helpful note in that context in which he identifies a number of serious failings in essentially administration and the proper conduct of the litigation. The solicitors have written apologising and acknowledging the errors, and to my mind properly have not sought to argue that the standard, which is a high standard set by the relevant rules, is not met in that context. Therefore, it seems to me that there should be a wasted costs order in respect of that part of the claim.
101. The costs schedule, it is accepted, includes two items which are not properly included in that part of the costs, and they total £1,620, leaving in that part of the schedule £2,245. It then is a matter for me to assess those costs. It has been said that costs claimed on behalf of government departments are costs which only rarely get reduced on a taxation. I am not in a position to look in enormous detail as to the time spent. However, it does seem to me that it is appropriate for me to take a broad approach to that by way of taxation. I propose to assess that element of the costs in the sum of £2,000.
102. So far as the balance of the costs is concerned, the costs claimed come to £4,492. It seems to me that, in this case, those costs must follow the event, and on the same approach I am going to assess that figure at £4,000.
103. An application was not pursued for a wasted costs order in respect of that part of the claim before me today.
104. MISS OLLEY: My Lord, I am grateful.
105. MR JUSTICE CHARLES: That you both very much.