England and Wales High Court (Administrative Court) Decisions

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

		Royal Courts of Justice Strand London WC2A 2LL
		3 October 2012

1. MR JUSTICE SILBER: Mr Ian Watson, the claimant, was acquitted of three counts of common assault at Ipswich Magistrates' Court on 28 March 2011 following a decision by the prosecution not to oppose his application for the proceedings to be stayed for an abuse of process of court. He was awarded costs out of central funds in accordance with section 16 of the Prosecution of Offenders Act 1985.
2. The claimant submitted a claim for costs of £205,384.63 including VAT. On 15 August 2011, the National Taxing Team, which is the appropriate body for carrying out these taxations and is the defendant in these proceedings, made a determination that the claimant should be paid £112,009.72. After correspondence, the defendant allowed certain items, but there remained a dispute on a number of matters, including the appropriate hourly rate payable.
3. The claimant challenges the approach of the National Taxing Team to the way it determined his application for costs out of central funds. A number of different grounds were put forward as justifying the grant of permission but permission was refused in respect of all of them on paper. The application was renewed and permission was granted orally by Richards LJ and Collins J on 22 May 2012, but solely on the ground of whether it was Wednesbury unreasonable not to have assessed the solicitors' costs of the claim at less than £250 an hour. The costs were, in fact, assessed at the range of £203 to £217 an hour.
4. The defendant's costs order, which was made in favour of the claimant, allows an acquitted defendant's costs to be paid out of central funds. Any award under such an order has to be "reasonably sufficient to compensate him for any expenses properly incurred by him in the proceedings"; section 16(6) of the 1985 act.
5. Regulation 7(1) of The Costs in Criminal Cases (General) Regulations, the 1986 regulations, provides, among other things, that:

(1) The appropriate authority shall consider the claim, any further particulars, information or documents submitted by the applicant under regulation 6 and shall allow such costs in respect of -

(a) such work as appears to it to have been actually and reasonably done; and

(b) such disbursements as appear to it to have been actually and reasonably incurred as it considers reasonably sufficient to compensate the applicant for any expenses properly incurred by him in the proceedings.

(2) In determining costs under paragraph (1) the appropriate authority shall taken into account all the relevant circumstances of the case including the nature, importance, complexity or difficulty of the work and the time involved.

(3) When determining costs for the purposes of this regulation, there shall be allowed a reasonable amount in respect of all costs reasonably incurred and any doubts which the appropriate authority may have as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved against the applicant.

6. A significant amount of the claim related to the work billed by claimant's solicitors Sanders Witherspoon and it is for a Grade A fee earner. That firm claimed an hourly rate of either £250 or £275, but then sought a 50 per cent uplift to the hourly rate, effectively bringing the rate up to £375 or £412.50 an hour.
7. On 7 September 2011, the claimant's solicitors wrote to the defendant questioning the dis-allowance of the hourly rate and the dis-allowance of an uplift of various other factors. On 18 October 2011, the defendant issued the decision letter which is under challenge in which they allowed certain items that had previously been deducted, but it continued to disallow the hour rates and the uplift on the basis that they were not reasonable.
8. The first ground of the application is that the amount awarded was not reasonably sufficient to compensate the claimant for expenses properly incurred by him in the proceedings, bearing in mind the agreement made by the claimant with his solicitors to pay £250 an hour together with a possible uplift of up to 200 per cent.
9. Mr Gordon Wignall, counsel for the claimant, contends that the approach of the defendant was contrary on the approach advocated by Elias LJ sitting in this court in The Law Society of England and Wales v The Lord Chancellor [2010] EWHC 1406 Admin where he said that:

"The central concept behind section 16(6) is the principle of compensation. That means getting back what has been expended."

10. The claimant's second submission is that the amount claimed was reasonable bearing in mind that the case concerned exceptional circumstances as the prosecution was of a claimant who was a professional man of 45 years of age of good character and who was facing serious allegations as a result of false and baseless assertions made by what his counsel described as "an unscrupulous and manipulative witness". It was also said that the local branch of the Crown Prosecution Service acted in bad faith in this matter.
11. Another submission that has been made is that in making the assessment, the defendant failed to take into account the contractual rate.
12. The case for the defendant is that it was entitled to make the assessment which it did. It has been pointed out that there is no evidence that higher rates were regularly charged.
13. The significance of that is that when permission was granted on this point by Richards LJ, he explained, in the attendance note that we have been shown, that there was a shortage of relevant evidence to support the contention that £250 was a reasonable rate and it was unreasonable for the defendant to drop below that rate in assessing the case. He doubted whether the complexity had any bearing. It was not suggested the solicitor had any particular expertise. It was then said by him that the issue really comes down to the reasonableness of £250 an hour for work in that area, which he described as a narrow point and on which the evidence was deficient.
14. He, therefore, gave all parties an opportunity to put in further evidence in relation to it. Amended grounds were duly served by the claimant and t he relevant part of it stated that:

"The amount awarded by the defendant is not reasonably sufficient to compensate the claimant for expenses properly incurred by him in the proceedings. The amount charged was reasonable having regard to the practice of comparable firmness."

15. Mr Bedenham, counsel for the defendant, submits that no evidence has been filed to substantiate this claim, but in my view, it is important to bear in mind a number of factors.
16. The regime which is set out in regulation 7 requires the assessing body :-

(A) 17. first to consider whether "such work as it appears to it to have been actually and reasonably done."; and then

(B) 18. in relation to such work as had been actually and reasonably done in the words of regulation 7(5) "the appropriate authority shall allow such costs as it considers reasonably sufficient to compensate the applicant for any expenses properly incurred by him in the proceedings."

17. It is important to stress that this exercise does not require an indemnity to be given by the taxing authority for the costs which have actually been incurred by the party whose costs are being assessed but it must give weight to what is "reasonably sufficient to compensate for the applicant."
18. In this case, the claimant relies on a witness statement made by Mr Mark Harris, who is a solicitor employed by the claimant's firm. He explined that he had made a number of phone calls to local solicitors. Most of them either seemed to have answer phones or did not appear to give any helpful information. One firm did respond and that was Paul Robinson Solicitors of Westcliff-on-Sea, who explained their fee for earners and that Mr Vickers, who is the senior partner, and another partner, would have charged £220 an hour. He explained that they would impose a mark up of 100 per cent, which would be appropriate in those cases, but would be something which would be discussed with the client.
19. He did add the alternative to the mark up would be to instruct counsel. It is noteworthy in this case that is what was done in this case and so it would mean that a mark up would not be appropriate. So the evidence from that firm does not substantiate the claim that the defendant acted Wednesbury unreasonably in assessing the claimant's costs at below £250 an hour.
20. The claimant seeks to derive assistance from a witness statement of Mr Savage who is a criminal practitioner partner with Anthony King and Co who practice in the vicinity of the claimant's solicitors. He explained that his rate for private clients for advocacy was £250 an hour. Of course, in this case, as we have explained, the solicitors instructed leading counsel.
21. It seems that what was envisaged by Richards LJ and Collins J when giving permission was that the claimant would adduce clear, cogent and convincing expert evidence to show that charging less than £250 an hour was Wednesbury unreasonable. I am driven to the conclusion that the evidence that has been adduced falls a long way short of showing that. For that reason, the application will subject to the views of my Lord, have to be refused.
22. I ought to say that an additional point raised by the claimant which is that the defendant erred by not considering the contractual rate. That indeed does not appear to me to have been one of the matters on which Richards LJ and Collins J gave permission. Having looked at the other grounds which were set forward and for which permission was refused, I would not have thought the claimant was entitled to pursue it, but in any event,I do not consider that there was any merit in this.
23. The claimant also contends that the defendant failed in its duty to give reasons in its decision letter but this objection has to be considered in the context that prior to the decision letter being sent , the claimant's solicitors had set out in detail why they were entitled to have a larger amount or a higher hourly rate. The decision letter rejects the point. It does not specifically refer to the contractual rate, but the decision letter does finish up by saying that:

"Any issue in relation to reimbursement of costs between our client and solicitor is a matter for them. The NTT's responsibility is to pay the solicitors a sum to represent the reasonable work which has been done on a particular case."

To my mind, that shows that consideration had been given to the contractual rate.

24. I would emphasise that in a decision letter of this sort, it is unnecessary for the decision- maker to comment on every point in the kind of detail that might be expected from a judgment given by a professional judge. All that is necessary is for the decision to be stated in such a way that the recipient of the decision letter knows in the light of the correspondence read as a whole what has been accepted and what has been rejected by the decision-maker. That was done in this case as it is clear that the successful party was not entitled to be indemnified but only to receive a reasonable sum..
25. For all those reasons, subject to the views of my Lord, this claim has to be dismissed.
26. LORD JUSTICE LAWS: I agree that the application should be dismissed for the reasons given by my Lord, Silber J.
27. MR BEDENHAM: My Lord, I am grateful. There is an application for costs. Costs were awarded by Calvert-Smith J when he refused permission on the papers. That was for the Acknowledgement of Service. Costs have now increased to a total of £4,700 as of today's date. My Lord, I would ask for those costs in full. Of course, a relevant consideration in assessing the reasonableness of the costs sought is that the claimant has sought -- a costs schedule has been filed --
28. LORD JUSTICE LAWS: Yes, it has.
29. MR BEDENHAM: -- in excess of £40,000.
30. LORD JUSTICE LAWS: £44,000.
31. MR BEDENHAM: So, my Lord, the Treasury Solicitors' and my costs pale into somewhat insignificance. In my submission, the amount should be allowed in full. If my Lord wants submissions as to the principle --
32. LORD JUSTICE LAWS: Do you have a written schedule?
33. MR BEDENHAM: My Lord --
34. LORD JUSTICE LAWS: You are presumably asking for a summary assessment.
35. MR BEDENHAM: My Lord, I am; for me and for the --
36. MR JUSTICE SILBER: Have we not seen it?
37. LORD JUSTICE LAWS: Yes, you sent it.
38. MR JUSTICE SILBER: I think it is one of the documents.
39. LORD JUSTICE LAWS: I have the other side schedule. Do I have that? Thank you.
40. MR JUSTICE SILBER: I have it, yes.
41. LORD JUSTICE LAWS: My Lord has it. Maybe I have and I have not seen it.
42. MR JUSTICE SILBER: £4,700.
43. LORD JUSTICE LAWS: I apologise.
44. MR JUSTICE SILBER: Yes.
45. LORD JUSTICE LAWS: Have you seen this, Mr Wignall?
46. MR WIGNALL: I have, my Lord. Thank you. My Lord, I am not clear from the schedule whether it is meant to cover just the costs of today or the costs of all the proceedings.
47. LORD JUSTICE LAWS: I think it is all that has been asked for.
48. MR BEDENHAM: My Lord, it is everything. It replaces the order made by Calvert-Smith J, which, of course, is revoked anyway.
49. LORD JUSTICE LAWS: So it is your whole costs of this application, including costs incurred before the initial refusal of leave.
50. MR BEDENHAM: My Lord, yes. It has been the full costs claimed. The Treasury Solicitor does not necessarily bill for all of the work.
51. MR JUSTICE SILBER: It does not take into account the costs of the hearing in front of Richards LJ and Collins J, does it? The only fee that is put there is just one fee, I think.
52. MR BEDENHAM: My Lord, I think --
53. LORD JUSTICE LAWS: That may be Mr Wignall's client's good fortune. We will see.
54. MR BEDENHAM: Indeed. I think it is the best estimate --
55. MR JUSTICE SILBER: Yes.
56. MR BEDENHAM: -- of fees.
57. LORD JUSTICE LAWS: All right. Thank you. Mr Wignall, (A) do you object in principle to an order for costs against your client? (B), if you do not or if we decide you should not, what about the summary assessment?
58. MR WIGNALL: Well, (A) I do not in principle. (B), when it comes to the amount, if this just covers today, then I would say the amount of hours expended is too much.
59. LORD JUSTICE LAWS: That is a brave submission given your client has asked for ten times as much as they are.
60. MR WIGNALL: If this is a schedule which covers all of the proceedings, then I say that the court should take a rolled up view and knock some ten per cent or so off.
61. LORD JUSTICE LAWS: Good for you, Mr Wignall.
62. We will order that the Taxing Team have their costs of this application and assess them summarily at £4,700.67. What is the VAT? Is there VAT involved or not? We do not have to worry our heads about that, do we?
63. MR BEDENHAM: My Lord, I do not believe you.
64. LORD JUSTICE LAWS: Okay, £4,700.67. Thank you, gentleman.
65. MR WIGNALL: Thank you, my Lord.