England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ON APPEAL FROM THE SENIOR COURTS COSTS OFFICE
COSTS JUDGE SIMONS

		Royal Courts of Justice Strand, London, WC2A 2LL
		8th May 2014

Mr Justice Akenhead:

The Background

1. The Appellant, Maclaverty Cooper Atkins ("MCA"), a firm of solicitors, appeals from the decision of Costs Judge Simons of 8 January 2014 in effect with his permission. The Lord Chancellor has been brought into the proceedings at this stage as the appropriate respondent under the requisite regulations. The appeal raises issues relating to the fee entitlements in criminal cases of litigators arising under the Criminal Defence Service (Funding) Order 2007 (the "Order").
2. The criminal case in question was heavily publicised at the time both of the murder involved but also of all the trials. On 25 March 2010 a group of some 20 youths from one school followed and attacked a 15 year-old boy from another school on to the concourse at Victoria Station and having attacked him at two locations and killed him they then fled. MCA's client, Victoria Osoteku ("VO") was said to be one of the main instigators of this attack. MCA, which was a "panel" solicitor with a contract to provide appropriate legal services in connection with criminal cases, was retained to act for VO, following the relatively early detention of all or most of the defendants.
3. On 21 May 2010, MCA applied to the Legal Services Commission ("LSC") for the case to be classified as a Very High Cost Case ("VHCC") under the Order, citing the facts that the trial would last 45 days, there would be multiple defendants and likely large quantities of documents. The LSC turned this down on 9 June 2010 on the following basis:

"…it appears that this case could fulfil the VHCC criteria as the trial is likely to last in excess of 40 days.

However, we note the number of non panel firms involved in this matter, and the disruption that could be caused by transfer of representation, especially taking into account the youth of many of the defendants, and the relatively limited costs benefit of contractual arrangements in all the circumstances of the case.

Given all these factors, and taking into consideration the optimum balance between the interests of justice and those of the public purse, the position of the Legal Services Commission is that there are exceptional circumstances here to justify funding this matter outside the relevant contractual arrangements, and so we do not intend to classify it as a VHCC…"

MCA followed this with a letter on 23 June 2010 expressing surprise but it did not take any other steps to challenge the LSC for instance by issuing an application for judicial review.

4. The Crown disclosed a substantial amount of documentation, including some CCTV evidence and in particular indicated that it would rely upon a CCTV compilation purporting to show both inside and outside Victoria Station who was doing what and where at different material times. The first trial started at the Old Bailey with VO as one of the defendants. After a few days, it became apparent that the Crown's CCTV compilation, at least as against VO, was hopelessly deficient and the trial judge allowed a three-month adjournment (initially) and ordered the jury to be discharged, at least in relation to VO, and the indictment against her in relation to this first trial to be severed.
5. The Crown then disclosed a substantial quantity of previously undisclosed CCTV material. MCA consequently and subsequently had to spend hundreds of hours reviewing all the CCTV material and produced a schedule running to 147 pages which was to be deployed at the trial. The trial judge was to write through his clerk later (on 31 October 2012) in the following terms, after he had heard that MCA would not be paid any more

"He [the judge] regards your many months of work viewing CCTV as essential to your client's case. Much of the trial centred around the interpretation of CCTV images, not only of your client, but of others. It was as a result of your work in this respect that the defence schedule of CCTV which was placed before the jury, and upon which so much of the focus of the trial was directed, came into existence. Judge Moss is of the firm opinion that you could not properly and adequately have discharged your professional duty to your client without performing this work. He regards the rejection of your claim for costs in this respect by the Legal Services Commission as outrageous…"

6. VO was convicted at the second trial. MCA sought additional payment in respect of some 869 hours of time spent in doing the further CCTV exercise which had taken many weeks of effort. The LSC rejected this claim as not falling with Schedule 2 of the Order. This was appealed against in mid-2013 and Costs Judge Simons dismissed the appeal on 8 December 2013 in a reasoned and coherent judgment. Although he found that the LSC wrongly failed to contract as a VHCC, he was constrained by the decision of Penry-Davey J in The Lord Chancellor v Michael J Reed Ltd [2009] EWHC 2981 (QB) but he did certify that there was point of principle of general public importance.

The Law

7. The Order defines at Article 2 the requirements for a case to be classified as a VHCC, namely for litigators that the trial will probably last more than 40 days subject to the LSC considering that "there are no exceptional circumstances which make it unsuitable to be dealt with under its contractual arrangements for" VHCCs. Other relevant articles are:

"4(1)Where a representation order is granted…for proceedings in the Crown Court…

(a) the Commission must fund representation in accordance with its duty under section 14 (1) of the [ Access to Justice Act]; and

(b) the provisions of this Order apply.

6 (1) Claims for fees by litigators in proceedings in the Crown Court must be made and determined in accordance with the provisions of Schedule 2 to this Order…"

Provision is made in Article 29 for fees to be determined by an appropriate officer with provision for an appeal in Article 30 for an appeal to a Costs Judge. Article 31 deals with appeals to the High Court; Article 30 (7) provides that the single judge's determination will be final and Article 30 (8) provides:

"The judge has the same powers as the appropriate officer and the Costs Judge under this Order and may reverse, affirm or amend the decision appealed against or make such other order as he thinks fit."

8. Schedule 2 addresses how fees are to be calculated. Paragraph 1(2) provides as follows:

"(2) For the purposes of this Schedule, the number of pages of prosecution evidence served on the court includes all –

(a) witness statements;

(b) documentary and pictorial exhibits;

(c) records of interviews with the assisted person; and

(d) records of interviews with other defendants

which form part of the committal or served prosecution documents or which are included in any notice of additional evidence, but does not include any document provided on CD – ROM or by other means of electronic communication."

9. Paragraphs 4 to 9 address the formula to be applied which is related to the class of offence, the length of trial and the numbers of pages of prosecution evidence. Paragraph 15 of Schedule 2 provides for additional fees where prosecution evidence has been served in electronic form only, as follows:

"15(1) This paragraph applies where, in any case on indictment in the Crown Court in respect of which a fee is payable under part 2, any or all of the prosecution evidence, as defined in paragraph 1(2), is served in electronic form only, and the appropriate officer considers it reasonable to make a payment in excess of the fee payable under Part 2.

(2) Where this paragraph applies a special preparation fee may be paid in addition to the fee payable under Part 2…"

The following sub-paragraphs provide guidance as to how this fee is to be calculated.

10. There have been a number of authorities which address the issues raised in these proceedings. In The Lord Chancellor v Michael J Reed Ltd [2009] EWHC 2981 (QB), Penry-Davey J (sitting with assessors) was concerned with a case involving the same Order and arguments based on Schedule 2 albeit in relation to a claim for £25.44 for time spent by a litigator viewing a CD provided by the prosecution and containing video footage of the road to which the dangerous driving charge in that case related. Relevant parts of the judgment are:

"3. The Criminal Defence Service (Funding) Order 2007 as amended ("the Order") provides a detailed and formulaic scheme for the calculation of fees payable to the representatives of defendants in criminal cases. The graduated fee scheme, the current version of which is set out in the Order was first applied to advocates by way of the Criminal Defence Service (Funding) Order 2001. The scheme was updated in the version of the Order which came into force on 30 April 2007. In particular, Schedule 1 of the Order which was entitled "Advocates' Graduated Fee Scheme" contained the detailed provision by which advocates' fees were to be calculated with regard to the length of trial, the nature of the offence and the number of pages of prosecution evidence (PPE). Schedule 2 to the original version of the Order was entitled "Litigators' Fees in the Crown Court" and contained a simpler scheme by which (in short) the fees of solicitors engaged in representing defendants in the Crown Court were to be calculated by reference to specified hourly rates. Pursuant to the Criminal Defence Service (Funding) (Amendment) Order 2007 a replacement Schedule 2 was inserted in the Order which came into force on 14^th January 2008. It extended to litigators the same model of graduated fee scheme that had previously applied to advocates. In particular, litigators' fees were now to be calculated pursuant to formulae based upon category of offence, length of trial and pages of prosecution evidence…

5. Pursuant to Article 6 of the Order, claims for fees by litigators in proceedings in the Crown Court must be made and determined in accordance with the provisions set out in Schedule 2 which was inserted by the Criminal Defence Service (Funding) (Amendment) Order 2007. The calculation of a litigator's fees in respect of a Crown Court trial depends upon whether or not the number of pages of prosecution evidence exceeds the "PPE cut off" as set out in paragraph 4. If the number of pages does not exceed that cut off the litigator's fee is calculated in accordance with paragraph 6. The final fee will be the basic fee, plus the length of trial proxy (if applicable) plus any uplift in respect of multiple defendants, transfers or retrials. If the number of pages of prosecution evidence does exceed the PPE cut off then the fee is calculated pursuant to the formula set out in paragraph 8. The final fee will then be an initial fee plus an increment calculated by reference to the number of pages of prosecution evidence. The number of pages of prosecution evidence in a particular case is calculated by reference to paragraph 1(2) of Schedule 2…

9. In my judgment the appeal must be allowed and the special preparation fee of £25.44 awarded by the costs judge must be set aside. My reasons are as follows:

(a) the wording of Paragraph 15 incorporating the definition in paragraph 1 (2) does not and cannot include DVD footage of the relevant section of road in this case. Indeed the wording clearly excludes such material.

(b) the costs judge's expressed reason for his conclusion, namely that the DVD was "central to the charge against the Defendant" and as such important for the solicitor to study, did not explain the basis on which he concluded that the DVD was within the definition, and was in itself no reason for such inclusion.

(c) his decision although expressed to be "on the facts of this case" is contrary to the clear wording of the Order.

(d) although it is clear from the background material put before me by the appellant that express consideration was given to electronic material in the consultation process which preceded the Order and that the intention was to exclude from Paragraph 15 electronic material of this kind, I have not found it necessary in considering the construction of the Order to seek assistance from that background material because the meaning is clear. However, it is the position that the expressed intention is reflected in and entirely consistent with the wording and meaning of the Order.

(e) The clear effect of paragraph 1(2) is to exclude from the calculation of prosecution pages of evidence any DVD, CD Rom, audio or video tape or other electronically served material. The definition excludes or, to use the wording of the Order, "does not include any document provided on CD –ROM or by other means of electronic communication." There is a limited saving for"any document" so served in Paragraph 15 ; but any material served electronically which does not come within the definition of " any document provided on CD-ROM or by other means of electronic communication" for example a DVD of moving footage is outwith the definition in paragraph 1(2) and outwith Paragraph 15. The result is that such material is not part of the fee calculation at all save as part of the basic/initial fee. That result also reflects the intention of the authors of the Order.

(f) Paragraph 15 also excludes any special preparation fee being awarded in respect of such material unless the material is within the definition in paragraph 1(2). If (and only if) such material is served in electronic form only, and it consists of "any document" can the additional material so served qualify for a special preparation fee in excess of the fee payable under Part 2 if the appropriate officer considers it reasonable to make such payment. The words "any document" in my judgment in context mean a still image, rather than moving footage (whether in the form of a DVD , CD-ROM or video or audio tape or some other electronic form) not intended for conversion to still images or which can not be so converted .

(g) I am fortified in my conclusion as to the meaning of paragraph 1(2) by the decision of Walker J in Goodman and Farr v Secretary of State for Constitutional Affairs (2007) 3 Costs LR 366 He concluded that the words "pages of prosecution evidence" did not encompass the DVDs and inlays in that case, which constituted real evidence and had not been copied, photographed or converted in to the form of electronic documents as distinct from a hard document. They did not constitute such pages. He said this at paragraph 45 "The schedule has chosen to work by reference to pages of prosecution evidence. That connotes to my mind something which is on a page." He left open the question of whether a page might take the form of an electronic document. The definition in the Order at that time did not contain the words subsequently added referring to documents provided on CD-ROM or otherwise electronically. The additional words considered together with Paragraph 15 resolve the question which Walker J left open to the extent explained in this judgment."

11. In The Lord Chancellor v McLarty and Co Solicitors [2011] 3182 (QB), Burnett J (sitting with assessors) addressed the same arguments in relation to 155 hours spent by litigators on listening to audio tapes of conversations arising out of a covert listening device for which 2,250 pages of transcripts had been provided. Burnett J set out relevant parts of Penry-Davey J's judgment as above, going on to say:

"18. In paragraph 9(f) of his judgment Penry-Davey J was doing no more than recognising that documents (whether pages of writing or pictures) may be provided electronically. Indeed, increasingly documents are circulated in all walks of life only by electronic means. Books may be downloaded onto various commercial devices. The Crown Prosecution Service are working on a scheme to enable trials to be conducted by prosecution, defence and judge without any paper but with all material being provided and used electronically. In all these examples, which could be multiplied, the recipient of the electronic material has undoubtedly been provided with documents with an identifiable page count. That is not to say that a recording of speech which could be transcribed can properly be described as a document, any more than could an audio book, nor that it can be equated with pages of prosecution evidence. Penry-Davey J was content to interpret the 2007 Order without recourse to the pre-legislative history of the consultation process because he considered the interpretation to be clear. I respectfully endorse that view. Whilst as a matter of legal theory it would be possible to depart from the interpretation of the Paragraph 15 arrived at by Penry-Davey J, on the basis that he heard only one side of the argument, in my judgment his reasoning is unassailable. Paragraph 15 is concerned with documentary material that has been served upon the defendant in electronic form only. The solicitors' submission that it provides a wide discretion to remunerate litigators in respect of time spent dealing with any electronic evidence is inconsistent with the plain language of the 2007 Order.

The consultation document is a proper aid to construction. Despite the criticisms advanced by Mr McNally of the data set which led to the proposal in paragraph 3.25 of the consultation paper (some of which echo those made in response to the consultation paper) it is clear that the proposal being made excluded additional payment for considering 'taped' material. The legislative history thus reinforces the conclusion arrived at by reference to the language of the Order itself."

Discussion

12. Mr Evans for MCA argues in a way which, I hope he will forgive me for describing it so, emphasises the undoubted merits of MCA's position. He points to the context in which MCA found itself having had its request for VHCC status turned down, he argues wrongly, by the Legal Services Commission. He refers to the position in which MCA found itself of having to spend hundreds of hours viewing and analysing vast quantities of CCTV evidence, belatedly after its client's case was severed as a result of the Crown's errors or omissions both in putting together a CCTV compilation which was demonstrably false as against MCA's client, and in failing to disclose a large quantity of CCTV evidence. He relies on what he says may be a different regime in relation to barristers' remuneration in these circumstances. He argues that Paragraph 1(2) in Schedule 2 differentiates between "prosecution evidence" and documents and pages, this pointing towards a reading of Paragraph 15 which allows for additional payment for a litigator addressing CCTV evidence. He also relies on comments made by the editor of Criminal Law Weekly to the effect that CCTV should be considered a "pictorial exhibit" within the meaning of Paragraph 1(2) which can attract a special preparation fee under Paragraph 15.
13. Ms Ayling for the Lord Chancellor argues that previous authorities were correct and there is no need or justification to depart from them. This was not a VHCC case and in any event, even if it was, the remedy was judicial review, any application therefor is hopelessly out of time and this is not the Administrative Court.
14. Although not bound by the decisions of Penry-Davey J and Burnett J, undoubtedly and at the very least I should attach considerable weight to them. The mechanics and basis of payment under the 2007 Order are, as they said, formulaic. Article 6 of the Order directs that entitlements are to be determined in accordance with Schedule 2 and, so, it is within Schedule 2 that one must find the entitlement. The formula was accurately summarised in Paragraph 5 of Penry-Davey J's judgment as set out above. The basis of assessment is not done as such on a time basis, which if the litigator's time was recorded accurately and was diligently and necessarily spent might be considered the fairest way of assessing what was due. That is not what Parliament resolved upon, for better or for worse. In its wisdom, doubtless with cost savings in mind, it decided on a formula which was pegged primarily to the class of offence, the length of trial and the number of pages of prosecution evidence provided (where they exceeded the numbers of pages referred to in the table set out in Paragraph 8 of Schedule 2). There is some rational basis for this in that the less paper provided the less preparation work there may well be. By the time of the Order, Parliament must be taken to have known that some and often considerable quantities of evidence in criminal cases could be electronic, be it hardware or software, digital, audio or otherwise, that much of this would be discloseable by the Crown and that only some of it would be disclosed by way of hard copy or pages as such.
15. The basic fee payable in any given case is thus set by the wording of Schedule 2 and I can assume that there may well be an element of "swings and roundabouts" on a variety of criminal cases for litigators with some cases proving more or less profitable depending on how time consuming the defence exercise turns out to be.
16. There is very little to be obtained from considering what the payment regime for advocates is. There are clearly different considerations applicable to litigators and advocates and the consultations between for instance the Bar and solicitors' organisations and the Ministry of Justice will have produced different emphases on the payment regimes.
17. There is nothing in Schedule 2 as such about there being any impact on the payable fees attributable to the case being a VHCC. The VHCC status and its consequences are addressed in the Order itself as opposed to Schedule 2. Therefore the fact that this case should have been classified as a VHCC (as the Costs Judge in this case recognised) is in itself neither here nor there. I should say, lest it be relevant, that I agree with the Costs Judge in this regard. There was no good reason for it not to be so classified. The given reasons, such as they were, were unsustainable and bear no relation to the basis of classification of cases that fall into the VHCC category; it can not have been a good reason to say that, if MCA's case was classified as a VHCC, this might lead to consequences on the public purse because otherwise it could be refused on every occasion as costing too much to classify a case as a VHCC. I fail to see why the fact that there were non-panel firms involved in representing some defendants should make any difference. The reasons given do not obviously amount to exceptional circumstances.
18. One needs to bear in mind that DVDs, CDs or other software are what they are. They can store a large amount of information which when physically printed produce a correspondingly large number of pages but, in themselves, are physically these days small and contain the information electronically. Electronically, by scientific means, it is just stored information.
19. Therefore the only route through to an additional fee is via Paragraph 15 of Schedule 2. Paragraph 15 however at least in sub-paragraph (1)(a) sends one back to Paragraph 1(2). This does not as such define pages but identifies that the number of pages of prosecution evidence served includes various categories, presumably a non-exhaustive list, but expressly excludes any document provided on a CD-ROM or by electronic communication. The difficulty for MCA is that Paragraph 15(1)(a) provides an exception to the exclusion in Paragraph 1(2) relating to "any document provided on a CD-ROM or by electronic communication" in effect by saying that where, "pages" have been transposed (presumably often for convenience or to save paper) on to some form of electronic storage or are sent through say by e-mail, a special preparation fee will be payable. The key here is the use of the words in Paragraph 15(1)(a) "where any or all or all of the prosecution evidence, as defined in Paragraph 1(2), is served in electronic form only". Paragraph 15(1)(b), which was not really relied upon by Mr Evans as assisting his argument, refers to "pages" and is simply related to where more than 10,000 pages are provided.
20. One is then left with the argument, belatedly advanced by Mr Evans, based on the references in Paragraph 15(1)(a) to "any or all of the prosecution evidence" and in Paragraph 1(2) to "prosecution evidence…which form part of the committal or served prosecution documents or which are included in any notice of additional evidence", that the later reference is not to "pages" but to anything by way of electronic documentation which might be called "prosecution evidence". I cannot accept this argument. Paragraph 1(2) unequivocally explains that the number of "pages" for the purposes of Schedule 2 includes certain categories, probably a non-exhaustive list thereof, but expressly excludes "any document provided on a CD-ROM or by electronic communication". Whatever else the number of pages are to be included for the purposes of calculating the fee payable, it does not include such documents so provided (by way of CD-Rom or by electronic communication). One can not verbally manipulate Paragraph 15(1)(a) so as to produce a result which was clearly not intended.
21. For these reasons, I consider that Penry-Davey and Burnett JJ were right in reaching the decisions which they did and that they are applicable.
22. Mr Evans also argued that Article 30(8) gave a free standing right on the part of this Court to do what was just and fair. This provides:

"The judge has the same powers as the appropriate officer and the Costs Judge under this Order and may reverse, affirm or amend the decision appealed against or make such other order as he thinks fit."

This does not give rise to some right, independent of the terms of the Order and the Schedules, to give some relief which is not provided for therein. It enables the Court to do what is fit to implement the Order. For instance, it might be that, if the Court had been with MCA, it could make an interim payment order to provide for some payment to MCA on account.

Decision

23. It follows from the above that I dismiss the appeal, properly argued though it was.
24. I would add this. I cannot believe that Parliament ever had in mind the exceptional circumstances raised by the facts of this case. I have little doubt that most proper thinking and well briefed parliamentarians would have thought that, in circumstances where the Legal Services Commission wrongly and wrongfully refused to classify the criminal case against MCA's client as a VHCC, where there was a massive amount of unforeseen and unforeseeable work necessary to address incorrect CCTV compilations and late and wrongly withheld CCTV evidence, attributable to the Crown's failings in the prosecution of that case and where, as here, the litigator has on all counts behaved with propriety, professionalism and a disregard for its own financial interest, there should be an exception to the rigours of Schedule 2. I would therefore invite the Lord Chancellor, in these exceptional circumstances to consider ways of providing appropriate recompense to MCA, albeit possibly on an ex gratia basis.