England and Wales High Court (Administrative Court) Decisions

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

		Royal Courts of Justice Strand London WC2A 2LL
		16 November 2012

1. LORD JUSTICE RICHARDS: The central issue in the application before us is whether the Crown Court has power under regulation 3 of the Costs in Criminal Cases Regulations 1986 ("the 1986 Regulations"), made under section 19(1) of the Prosecution of Offences Act 1985 ("the 1985 Act"), to make a costs order against a party to criminal proceedings in favour of another party's counsel.
2. The relevant order was made by HHJ Everett in the Bolton Crown Court, on 24 March 2011, in relation to the costs of a plea and case management hearing ("PCMH") which had to be adjourned because, as the judge held, the case had not been prepared properly by the CPS and the papers were nowhere near ready. He ordered the CPS to pay costs of £100 plus VAT to defence counsel, Miss Amanda Johnson, on the basis that she had lost a day's hearing for which she would not receive any compensation by way of remuneration under the Advocates' Graduated Fee Scheme. The CPS challenges the order primarily on the ground that it was one the judge had no power to make. The sum in question is small but the underlying issue is one of wider importance.
3. The background is set out in a lengthy written judgment given by the same judge on 23 December 2009 in earlier proceedings, R v Hancock and Others. That judgment expressed serious concerns about poor performance on the part of the CPS. It stressed the importance of ensuring that PCMHs were effective but said that many such hearings did not proceed as they should because of problems with the CPS. There was inadequate preparation and consideration of cases by CPS reviewing lawyers. PCMHs were often adjourned because the prosecution was not ready. The judge understood the problem to be a widespread one, not confined to Bolton. He said that he and his colleagues had tried all sorts of remedies to try to persuade the CPS to put its house in order, but with no great overall success. The judges had therefore taken to making costs orders against the CPS, and the only order that properly reflected the difficulties was one in favour of defence counsel and, where relevant, defence instructing solicitors. The judge went on to give reasons why he considered there to be power to make such an order under section 19(1) of the 1985 Act and regulation 3 of the 1986 Regulations. I will come back to those reasons in due course.
4. In making the order now under challenge, the judge relied on that previous judgment of his in the Hancock case without adding materially to it, save to give reasons why he considered an order under regulation 3 and section 19(1) to be appropriate in the particular circumstances of the instant case. He also referred to the difficulty of identifying an individual CPS lawyer who was at fault so as to engage the power to make a wasted costs order against that individual, pursuant to section 19A of the 1985 Act.
5. I have referred to the concern that in the circumstances defence counsel would receive no compensation by way of remuneration under the Advocates' Graduated Fee Scheme for attendance at the ineffective PCMH. This calls for further explanation. Article 5(1) of the Criminal Defence Service (Funding) Order 2007 provides:

"Claims for fees by an instructed advocate in proceedings in the Crown Court must be made and determined in accordance with the provisions of Schedule 1 to this Order."

6. Paragraph 4(1) of Schedule 1 sets out the formula for calculation of the graduated fee in a case which proceeds to trial. It includes the "basic fee". Paragraph 6 provides that a fee payable in the case of a guilty plea or cracked trial also includes the "basic fee". Paragraph 9(1) provides that the basic fee includes the first PCMH and up to four "standard appearances". The expression "standard appearance" is defined in paragraph 1(1) of the Schedule as including a PCMH (except the first PCMH) and an ineffective hearing. If therefore counsel has to attend two PCMHs rather than one, because the prosecution papers are not ready for the first hearing and it has to be adjourned, counsel gets nothing more than the one basic fee. The fee structure allows no additional remuneration for the wasted attendance at the adjourned hearing.
7. The judge referred to a protocol agreed by the Bar whereby, when the instructed advocate is unable to attend a PCMH and a substitute advocate attends in his or her place, the substitute advocate is paid £100 plus VAT out of the instructed advocate's graduated fee. The details of those arrangements, though plainly very important for counsel concerned, do not matter for present purposes, but they explain the source of the judge's figure of £100 plus VAT as the amount he considered appropriate to award to defence counsel under the costs order he made against the CPS. In the particular case, however, defence counsel, Miss Johnson, was herself the instructed counsel so no question arose of payment of a fee to a substitute counsel.
8. I should now set out the provisions under which the judge purported to make the costs order in question. Section 19(1) of the 1985 Act provides:

"The Lord Chancellor may by regulations make provision empowering magistrates' courts, the Crown Court and the Court of Appeal, in any case where the court is satisfied that one party to criminal proceedings has incurred costs as a result of an unnecessary or improper act or omission by, or on behalf of, another party to the proceedings, to make an order as to the payment of those costs."

Regulation 3 of the 1986 Regulations makes provision in terms similar to those of the empowering statute:

"(1) Subject to the provisions of this regulation, where at any time during criminal proceedings -

(a) a magistrates' court,

(b) the Crown Court, or

(c) the Court of Appeal

is satisfied that costs have been incurred in respect of the proceedings by one of the parties as a result of an unnecessary or improper act or omission by, or on behalf of, another party to the proceedings, the court may, after hearing the parties, order that all of the costs so incurred by that party shall be paid to him by the other party.

...

(3) An order made under paragraph (1) shall specify the amount of costs to be paid in pursuance of the order."

9. On behalf of the CPS Mr Edis QC advances three broad grounds of challenge to the order made by the judge in this case: first, that the judge erred in law and acted without jurisdiction in making the order, since such orders could only be made in favour of a party to the proceedings, and defence counsel was not a party to the proceedings; secondly, that the judge misdirected himself in law when addressing the question whether costs had in fact been incurred by defence counsel in respect of her attendance at the PCMH in question; and thirdly, that the judge misdirected himself in determining whether the CPS's preparation for the PCMH was so defective that it should be described as improper conduct.
10. In relation to the first two of those grounds, the court has also had the benefit of submissions from Mr Nicholas Lavender QC and Mr Robert Dalling on behalf of the General Council of the Bar, which, pursuant to a suggestion made when this matter was last before the Divisional Court, has been granted leave to intervene. Neither the Crown Court nor Miss Johnson, the beneficiary of the costs order, has played an active part in the proceedings.
11. Before I consider the grounds advanced I should deal with a threshold issue properly raised by Mr Edis, namely the question of this court's jurisdiction to entertain the present application. Section 29(3) of the Senior Courts Act 1981, as amended, provides:

"In relation to the jurisdiction of the Crown Court, other than its jurisdiction in matters relating to trial on indictment, the High Court shall have all such jurisdiction to make mandatory, prohibiting or quashing orders as the High Court possesses in relation to the jurisdiction of an inferior court."

12. Mr Edis submits that an order under section 19 of the 1985 Act and the implementing regulation is not a matter relating to trial on indictment within the meaning of section 29(3) but is the result of a separate inquiry into the conduct of a party in connection with such a trial. He has referred us to the decisions of the House of Lords in In re Smalley [1985] AC 622 and In re Sampson [1987] 1 WLR 194, and to the decisions of the Divisional Court in R v Wood Green Crown Court ex parte DPP [1993] 1 WLR 723 and R (on the application of Her Majesty's Customs and Excise) v the Crown Court at Leicester [2001] EWHC (Admin) 33.
13. Those are some of the cases on what on its margins has proved to be a problematic question as to the limits of judicial review of the Crown Court. The courts have avoided judicial definition of the exclusionary words in section 29(3), though various pointers have been formulated, including whether the order or decision sought to be reviewed was one "affecting the conduct of a trial upon indictment" (see Smalley), whether it was "an integral part of the trial process" (see Sampson) and whether it was one "arising in the issue between the Crown and the defendant formulated by the indictment" (see the decision of the House of Lords in R v Manchester Crown Court, ex parte DPP [1993] 1 WLR 1524). As it seems to me, all those pointers tell against the present situation falling within the exclusion.
14. It is true that it was held in Sampson that costs orders at the end of a trial were excluded from judicial review, but that was because the orders in question were made between the parties and were considered to be an integral part of the trial process. An order for the payment of costs to a defendant's counsel in respect of an adjourned PCMH cannot, in my view, be so described.
15. In the Wood Green case to which Mr Edis referred us, the court was prepared to entertain jurisdiction in relation to a costs order made against the Crown in favour of a defendant after the Crown had offered no evidence and a not guilty verdict had been entered. The court distinguished Sampson on the basis that there had been no trial. But that decision relied on authority that was overruled by the House of Lords in In re Ashton [1994] 1 AC 9 and must therefore be treated with considerable caution.
16. The Crown Court at Leicester case relied on by Mr Edis related to an order under section 19(1) of the 1985 Act and regulation 3 of the 1986 Regulations, against the Crown and in favour of an acquitted defendant. The court accepted in that case that section 29(3) would ordinarily prevent judicial review of such an order. The court contemplated the possibility that an order made without jurisdiction might nonetheless be reviewable but it found that the order under challenge was not one made without jurisdiction.
17. I see difficulties in an approach that depends upon drawing a distinction between jurisdictional error and non-jurisdictional error, but I do not think that that approach is needed, in any event, for the purposes of the present case. An order made against the Crown and in favour of the defendant at the end of the trial comes squarely within the reasoning in Sampson. As I have already indicated, however, it seems to me that that reasoning does not apply to an order made at the stage of a PCMH and in favour of counsel rather than as between the Crown and the defendant. The fact that the order in question is made under the same legislative provisions as in the Crown Court at Leicester case is not determinative. What matters is the substantive situation with which one is concerned, and for the reasons I have given this particular situation, which is in truth a relatively narrow one, does not seem to me to fall within the exclusion in section 29(3).
18. I conclude that this court has jurisdiction to entertain the application before us.
19. I therefore move to consider the first substantive issue, which is whether defence counsel in whose favour the order was made was a "party" to the proceedings within the meaning of the relevant provisions. On this Mr Edis and Mr Lavender speak with one voice. They submit that defence counsel was not a party. I agree with them: it seems to me that they are plainly correct. The point is a short one.
20. On the ordinary and natural meaning of the word "party", the parties to the proceedings were the Crown and the defendant. Counsel, Miss Johnson, represented the defendant but she was not herself a party. That construction is supported by section 19A of the 1985 Act, containing the wasted costs jurisdiction, which draws a clear distinction between parties on the one hand and their legal representatives on the other hand. In subsection (3) it defines "legal or other representative", in relation to proceedings, as "a person who is exercising a right of audience, or a right to conduct litigation, on behalf of any party to the proceedings". Mr Lavender makes the further point that if a legal representative were a party, section 19A would be simply unnecessary.
21. We have not been directed to any other provision of the 1985 Act that could remotely suggest that the expression "party to the proceedings", or a cognate expression, is intended in this legislative context to have anything other than its ordinary and natural meaning.
22. As appears from his judgment in the Hancock case, the judge took the view that a wider meaning had to be given to "party" in section 19 and regulation 3 in order to avoid unfair and anomalous consequences. An advocate acting under the Graduated Fee Scheme could not otherwise be compensated for loss occasioned by improper conduct by the CPS. By contrast, where an advocate is instructed privately the CPS could be made to pay wasted costs under section 19A. The judge therefore considered that "party to the proceedings" in section 19 should be construed as including not only the Crown and the defendant but, as he put it, "anyone who had a sufficient interest to make him a party", and in the judge's view advocates were undoubtedly such persons. The judge said that public policy demanded that wider construction.
23. Whilst I sympathise with the result that the judge wished to produce, I do not think that his construction of the legislation was open to him. It is a strained construction, one potentially productive of unfortunate, unintended consequences, and is in my view untenable. It cannot have been the legislative intention when the 1985 Act was enacted; and considerations of policy arising out of a problem caused by the structure of the Graduated Fee Scheme in the form adopted in 2007 cannot possibly justify the adoption of a different construction of the 1985 Act now.
24. That conclusion makes it unnecessary to reach any decision on the second and third of Mr Edis's grounds, that is whether defence counsel incurred costs and whether there was an improper act or omission by the CPS. I think it right, however, simply to note a submission made by Mr Lavender to the effect that if counsel was to be treated as a party to the proceedings for relevant purposes, there is a line of authority, long established though arguably anomalous, as he puts it, that barristers and solicitors who are parties to litigation and who represent themselves in that capacity can recover costs in respect of the loss they have incurred through representing themselves. Reference is made, in particular, to R v Stafford Stone and Eccleshall Justices, ex parte Robinson [1988] 1 WLR 369 at pages 372E-374A, and R (on the application of Crowch) v DPP [2008] EWHC 948 (Admin) at paragraphs 12-15. I note the point that has been identified but, as I have said, I do not think it necessary to reach any decision in relation to this aspect of the case.
25. Mr Lavender has also pointed out that the judge would have had jurisdiction to make an order that the CPS pay costs to the defendant if any such costs had actually been incurred, and he has referred to what was said in R v P [2011] EWCA Crim 1130, at paragraph 11, as to how such an order might be framed so as to enable costs to be passed on to a legal representative or the legal aid authorities, as appropriate. He acknowledges that in the present case, because of the way the Graduated Fee Scheme operates, the defendant did not incur any costs as a result of the actions of the CPS which the judge found to be improper. The fact that the first PCMH was ineffective did not lead to any increase in the fee payable to the counsel. A point might, however, arise if, for example, there should be a case in which there had been more than four standard appearances and an additional amount was then payable to defence counsel under the Graduated Fee Scheme in respect of a further appearance that proved to be a wasted appearance.
26. It follows from what I have said that in my view the costs order made by the judge must be quashed; nor was there any obvious alternative route by which he could impose a costs sanction against the CPS for what he found to be a lack of preparation resulting in an effective PCMH, or compensation to defence counsel for a wasted attendance.
27. In relation to this Mr Lavender, in his commendably fair and balanced written submissions on behalf of the Bar Council, has expressed a general concern which I think it right to quote in full:

"(1) The judge's Judgment in R v Hancock et al raised concerns about inefficiencies in the conduct of criminal cases in the Bolton Crown Court and the extent to which the Judge considered that the CPS was responsible for those inefficiencies. It would not be appropriate to comment on the specifics of the Judge's complaints about the CPS, but the efficient operation of the criminal courts is a matter of concern to all involved in the criminal justice process.

(2) The Judge has rightly identified that defence advocates will usually suffer loss if a PCMH or other hearing has to be adjourned because of fault on the part of the CPS.

a) The advocate will expend time, possibly giving up other opportunities to earn fees, and may incur travel and other expenses, in attending an ineffective hearing.

b) If the instructed advocate is unable to attend the ineffective or the adjourned hearing, then the substitute advocate who attends will receive a share of the case fee, thereby reducing the income to the instructed advocate unnecessarily.

(c) Unless there are five or more 'standard appearances' in the case, the instructed advocate will not receive any additional fees from the Legal Services Commission to compensate for the above.

(3) One of the reasons for amending the Graduated Fee Scheme in 2007 so as to include the first PCMH and up to four 'standard appearances' in the 'basic fee' was to provide a financial incentive for defence advocates to ensure that there were no unnecessary 'mention' hearings in a case and that the only interlocutory hearings which took place were those which were necessary and effective. There ought to be a corresponding incentive on the CPS and defence advocates ought not to suffer loss where hearings are ineffective as a result of fault on the part of the CPS.

(4) The jurisdiction to make wasted costs orders does not provide a satisfactory solution to this problem, since that involves identifying a specific CPS lawyer who is at fault, whereas the issue may simply be (as the Judge saw it) with the overall performance of the CPS.

(5) These issues will have to be addressed with the Legal Services Commission and the Ministry of Justice. Regrettably, however, the solution proposed by the judge in the present case does not appear to be one which was open to him."

28. The concern so expressed has obvious weight and merit to it, and I would endorse it.
29. MR JUSTICE OUSELEY: I agree. I would just add two points: first of all, I have some sympathy with the judge in this case because his persistence in making orders of this sort may have been emboldened by the absence of challenge to his reasoned judgment in Hancock, prepared at some length precisely because it was envisaged that a challenge would be made to it; secondly, I have sympathy with him because he was trying to provide some understandable protection for defence counsel and an appropriate spur to the CPS where it fell below the required standard.
30. It is clear that his attempted solution is no solution at all, and now that is fully appreciated in Bolton and elsewhere, attention has to be focused, as Mr Lavender points out, on some other potentially legislative solution.
31. LORD JUSTICE RICHARDS: Thank you both very much. So no further orders are required.