The Law Commission

PART X COSTS

10.1     The rule governing costs in cases in the Crown Office List is the general rule which states that:

"the costs of and incidental to all proceedings ...in the High Court ... shall be in the discretion of the court ... [and] the court shall have full power to determine by whom and to what extent the costs are to be paid."^[1]

The general principle is that costs follow the event although, as stated above, the award of costs is always discretionary.^[2] The rules in relation to costs will usually come into consideration after the substantive hearing of an application for judicial review.^[3] However, an applicant can obtain costs where leave has been granted and the respondent performs the act for which the order is sought. ^[4] A respondent can obtain costs where the leave application is successfully opposed^[5] or where he successfully applies for an order setting aside the grant of leave.^[6]

Costs on the leave application

10.2      The consultation paper^[7] invited views on the extent to which costs rules might be used to further the purpose of the leave stage whilst minimising the cost expended.^[8] At present the court has jurisdiction to make an order for costs on an inter partes leave hearing as this constitutes "proceedings" for the purpose of section 51 of the Supreme Court Act 1981.^[9] It follows that where a respondent successfully opposes a leave application (or successfully applies for leave to be set aside^[10]) the respondent is prima facie entitled to his or her costs.
10.3      In a case where an application for leave has been lodged at the Crown Office, and the respondent makes such a substantial concession that there is no need for the application to proceed further, an applicant may obtain his or her costs.^[11] In Part V we have proposed that all applications for preliminary consideration should be made entirely on paper in the first instance unless the application includes a claim for immediate interim relief or the application judge dealing with the matter considers it desirable in the interests of justice to hear oral submissions.^[12] The philosophy underlying our proposals is that this preliminary stage of an application ought not to involve the applicant in having to pay the costs of a respondent when he or she is seeking to surmount for the first time the initial hurdle of arguability, and we consider that normally a respondent should not be entitled to costs in relation to appearing on an oral application for which the court does not request his or her presence. On the other hand, if the applicant renews his or her application in open court after it has been initially rejected by a judge on paper, we see no reason why the normal regime as to costs should not apply, and this discipline should make a party's advisors reconsider the merits carefully before deciding to renew an application. We therefore recommend that in those cases where an oral hearing is required by the court on its first consideration of an application the court should not normally order the applicant to pay a successful respondent's costs unless the court has specifically requested the respondent to attend: on the other hand if an applicant renews his application after it has been refused on paper the court should have the power to make a costs order in favour of either applicant or respondent,

The substantive hearing

10.4      It was also provisionally proposed in the consultation paper^[13] that, where leave had been granted to allow a challenge to the act or omission of a central or local government body, the usual costs rules should be disapplied because of the Crown's interest in the courts exercising proper supervisory control of decision-making bodies. Of those who commented, the Administrative Law Bar Association and many of the "respondent" consultees considered this argument lacked force, especially where the successful respondent was a local authority which was possibly itself operating under severe financial restraints. However, disapplication of the general rule was favoured by some consultees in cases which raised an important issue which it was for the advantage of the public as a whole (or of a section of it) and of the respondent body to have determined.
10.5      The consultation paper suggested that, where an application brought in good faith in the public interest is unsuccessful, the applicant should not be obliged to pay the other side's costs.^[14] A number of consultees disagreed with this proposal and were of the view that costs should follow the event as at present.^[15] It was argued^[16] that actions brought in good faith and in "the public interest" were not confined to judicial review cases and ring-fencing a relaxed regime on costs in this way would be an oblique method of funding pressure groups. However, many consultees favoured departure from the usual practice in a public interest challenge where the real value of litigation was not the protection of the individual against a public authority but the resolution of a question of public importance. In view of the developing case law^[17] we consider that the present discretion to determine "by whom and to what extent costs are to be paid" is sufficient. On the other hand, for the reasons set out in paragraph 10.6 below, we consider that it would be desirable for the court to have the power, in specified types of case, to order that the costs of a successful party should be met, in whole or in part, out of central funds. Accordingly, we recommend that where a case is allowed to proceed to a substantive hearing on the basis of either a public interest challenge or for the purpose of seeking an advisory declaration,^[18] a successful party's costs may be awarded either against the other party or out of central funds^[19] at the judge's discretion.

Costs from central funds

10.6      A number of consultees suggested that judges should have power to award costs from central funds^[20] in civil cases^[21] particularly where there was no other source from which costs could be paid. Another option would be to enable the court to grant legal aid either for the application for leave or for the substantive hearing. On this point we are of the view, after discussing the matter with the Master of the Crown Office, that the task of establishing the means of prospective applicants would be beyond the administrative capabilities of the Crown Office and we therefore do not propose any scheme whereby the court could award legal aid. However, we do recommend that costs should be available from central finds where a case has been allowed to proceed to a substantive hearing on the basis of either a public interest challenge^[22] or for the purpose of seeking an advisory declaration^[23] (Draft Bill, clause 1, new section 31B(4)).

Legal Aid

10.7      Our consultation paper invited consultees to comment on the availability of legal aid for judicial review. In their response the Legal Aid Board predict that the Public Law Project's research will show that the rate of grant of legal aid in judicial review proceedings is, overall, about the same as for civil non-matrimonial cases generally, but that there are regional variations between different types of case.^[24]

Types of legal aid

10.8      More than one form of legal aid may be involved in a judicial review case: Green Form,^[25] an Emergency certificate, and a full Civil Legal Aid Certificate. Advice by way of representation (ABWOR) is not available although some consultees favoured its extension to public law cases. We have been informed that the Crown Office is not always aware of the type of legal aid obtained by applicants. For this reason, and because delays sometimes arise because applicants are appealing against a refusal to grant legal aid,^[26] it is proposed in Part IV that applicants should inform the Crown Office on Form 86A of the date of any application for legal aid (if relevant) and the date when it was granted or refused and, if granted, the number of the legal aid certificate.^[27]

The test for obtaining legal aid

10.9      The statutory legal aid tests are the same as for any other type of proceedings.^[28] One area of concern to consultees was the inadequacy of the legal aid scheme to address situations where there was a public or wider group interest in a decision rather than a specific, identifiable, personal interest.^[29] It is recommended that the Civil Legal Aid (General) Regulations 1989 be amended to enable the Board to consider the wider public interest in having the case heard. This would assist applicants who, although there was a public interest involved, might otherwise be refused legal aid because it appeared that so far as they were concerned only a trivial advantage would be gained by the application from the proceedings in question^[30] or which could not be justified by the costs involved.^[31]
10.10      At present the assisted person and/or the Legal Aid Board may have an order for costs made against them but only subject to a number of restrictions and limits.^[32] A number of local authority consultees told us that they believed that legal aid was being granted too readily in judicial review cases which lacked any real merit, and that once legal aid had been granted, the effect of this rule placed them at a severe disadvantage in such cases. We do not have the material on which we could judge the reasonableness of this complaint, but we record it here because it was expressed to us with considerable force by a number of responsible local authority respondents. Other consultees, including the Public Law Project, said that, particularly in the area of housing, obtaining legal aid provided leverage in getting respondents to settle. We agree with the view expressed by the Legal Aid Board that there is no reason why judicial review proceedings should be treated differently from other cases in order to enable a respondent to recover costs from the fund if successful against a legally aided applicant.^[33]

Note 1   Supreme Court Act 1981, s 51 as amended by the Courts and Legal Services Act 1990, s 4.    [Back]

Note 2   For the principles to be applied see Scherer v Counting Instruments Ltd [1986] 1 WLR 615. Issues to be considered may include the conduct of both parties. Eg in R v IRC ex p Opman International UK [1986] 1 WLR 568 (DC), Woolf J held that no order for costs should be made because the applicant did not write a “letter before action”.    [Back]

Note 3   A court granting leave for judicial review may impose conditions as to costs and the giving of security: O 53, r 3(9).    [Back]

Note 4   In R v Liverpool City Council, ex p Newman [1993] COD 65, per Simon Brown J, it was said that the general rule concerning costs on discontinuance only applied when the discontinuance could safely be equated with defeat or an acknowledgment of defeat both in general civil litigation and in judicial review.    [Back]

Note 5   See para 10.2 below. If the leave application is treated by consent as the application of the hearing itself, the respondent will also recover his or her costs in the event the application is dismissed: R v Chiltern District Council, ex p Roberts [1991] COD 214.    [Back]

Note 6   R v Darlington BC, ex p Association of Darlington Taxi Owners (No 2), The Times 14 April 1994.    [Back]

Note 7   Consultation paper No 126, para 11.8.    [Back]

Note 8   The Public Law Project has estimated that although the applicant’s costs will vary according to the complexity of the matter and the stage at which the case is concluded, total costs in obtaining counsel’s opinion on merits may be between £500 and £1,000. Completion of an application for leave is likely to cost between £1,500 and £2,500, and to take a case through to a substantive hearing may involve costs of between £7,500 and £15,000.    [Back]

Note 9   Secretary of State for Wales v Rozhon [1994] COD 111.    [Back]

Note 10   R v General Medical Council, ex p Popat [1991] COD 245; R v Darlington BC, ex p Darlington Taxi Owners (No 2), The Times 14 April 1994.    [Back]

Note 11   In R v The Royal Borough of Kensington and Chelsea, ex p Ghebreslase Ghebregwgis (unreported judgment of Brooke J (C0/3624/93) 10 June 1994), the cost of having to apply for leave was awarded against a respondent who failed to act until after the leave application had been made despite the fact that the applicant had already written in clear terms pointing out the relevant provisions that should have been applied to the decision in question.    [Back]

Note 12   See para 5.11 above.    [Back]

Note 13   Consultation Paper No 126, para 11.14.    [Back]

Note 14   Consultation Paper No 126, paras 11.9 - 11.10.    [Back]

Note 15   It was felt to be particularly unfair in cases where the application judge had granted leave on the basis of a perusal of the papers which the respondent had not seen, and had not had the opportunity to comment on and which might therefore be inadequate. However, in the light of the proposals made in paras 4.5 - 4.11 above we consider this objection loses force.    [Back]

Note 16   Eg by the Treasury Solicitor’s Working Group.    [Back]

Note 17   Eg New Zealand Maori Council v Attorney General of New Zealand [1994] 2 WLR 254 (PC), (where no order as to costs was made on appeal); and R v Secretary of State for the Environment, ex p Greenpeace Ltd, The Independent 8 March 1994 where, although leave was refused, no order as to costs was made.    [Back]

Note 18   See paras 5.22 and 8.9 - 8.14, above.    [Back]

Note 19   See para 10.6, below.    [Back]

Note 20   According to Schedule 1 to the Interpretation Act 1978, ‘central funds,’ in any enactment providing in relation to the England and Wales for the payment of costs out of central funds, means money provided by Parliament.    [Back]

Note 21   In criminal causes the Divisional Court has an express statutory power to order the costs of defendants out of central funds (Prosecution of Offences Act 1985, ss 16(1) and (5)) and for the costs of other parties (ibid ss 17, 19 and 21 (1)). In Holden v CPS (No 2) [1994] AC 22 the House of Lords held that there was no express statutory authority to order payment of a solicitor’s costs out of central funds as jurisdiction to make such payment had been conferred only on the Criminal Division of the Court of Appeal.    [Back]

Note 22   See para 5.22 above.    [Back]

Note 23   See paras 8.9 - 8.14, above.     [Back]

Note 24   This is confirmed by the Public Law Project in informal discussion.    [Back]

Note 25   In R v Legal Aid Board, ex p Higgins, The Times, 19 November 1992, DC, it was held that it was not necessarily an abuse of the Regulations to extend the financial limits of the Green Form scheme in order to commission costly expert reports for the purpose of advising on a case which was outside the scope of the Legal Aid Act.    [Back]

Note 26   If an application is refused by the area office, then the client has a right to appeal to the area committee: Civil Legal Aid (General) Regulations 1989, reg 35. If the area committee refuse the appeal, then that decision is final unless the decision itself is susceptible to judicial review. In R v Legal Aid Area No 8 (Northern) Appeal Committee, ex p Parkinson, The Times, 13 March 1990, Simon Brown J held that the area committee could be required to give extended reasons for the decision to refuse legal aid, particularly in cases of considerable public interest and importance.    [Back]

Note 27   See para 4.5 above, and Draft Order 53, rule 3(2)(e) in Appendix A.    [Back]

Note 28   These include: financial eligibility, the legal merits test (Legal Aid Act 1988, s 15(2)), and the general reasonableness test (Legal Aid Act 1988, s 15(3)). R v Legal Aid Board, ex p Hughes (1993) 5 Admin LR 623 (CA), established that the test the Legal Aid Board should use in judging whether the applicant’s case had legal merits was in essence the same as the judge should apply on the leave application itself. The decision relates only to the application of the “legal merits test” and not the “general reasonableness test”, for legal aid.    [Back]

Note 29   See the Legal Aid Act 1988, ss 1 , 15. United Dominions Trust Ltd v Bycroft [1954] 3 All ER 455 (CA).    [Back]

Note 30   The Civil Legal Aid (General) Regulations 1989, SI 1989 No 339, reg 29.    [Back]

Note 31   Eg because the amount of their claim was small, the estimated cost exceeded any benefit to the client or the only matter at stake was the loss of status, dignity or reputation (Legal Aid Notes for Guidance para 6.08).    [Back]

Note 32   Legal Aid Act 1988, ss 17, 18. The assisted person can only be ordered to pay what is reasonable having regard to all the circumstances, including the financial resources of all the parties and their conduct in connection with the dispute.    [Back]

Note 33   The relevant statutory provisions are set out in the Legal Aid Act 1988, s 18.    [Back]