Seaga v Harper (Jamaica) [2009] UKPC 26 (29 June 2009)

Privy Council Appeal No 90 of 2006

Edward Seaga 								Appellant

v.

Leslie Harper	Respondent

FROM

THE COURT OF APPEAL OF
JAMAICA

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JUDGMENT OF THE LORDS OF THE JUDICIAL
COMMITTEE OF THE PRIVY COUNCIL

Delivered the 29TH June 2009

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Present at the hearing:-

	Lord Scott of Foscote
	Lord Walker of Gestingthorpe
	Lord Mance
	Lord Neuberger of Abbotsbury
	Sir Henry Brooke
	
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[Delivered by Sir Henry Brooke]

1.	In this action the respondent Leslie Harper, who was at the material time a Deputy Commissioner of Police in Jamaica, recovered damages for slander from the appellant Edward Seaga, who was then the leader of the Opposition Labour Party in Jamaica.  The claim arose out of words spoken by Mr Seaga in a speech in Kingston, Jamaica, on 2nd October 1996. The trial judge held that the appellant was not protected by qualified privilege and awarded J$3,500,000 damages.  The Court of Appeal in Jamaica dismissed his appeal but reduced the award to J$1,500,000.  Mr Seaga then appealed to the Board on the issue of liability, and on 30th January 2008 the Board advised Her Majesty that his appeal should be dismissed with costs on the standard basis.  
2.	Mr Harper’s English solicitors and counsel agreed to represent him in the proceedings before the Board under Conditional Fee Agreements (“CFAs”).  Mr Harper also took out “after the event” (“ATE”) insurance cover.  When his bill of costs was lodged with the Registrar, she referred it to the senior costs judge (Master Hurst) for taxation.
3.	On 24th October 2008 Master Hurst taxed Mr Harper’s costs (excluding the success fee uplift and the disbursement on the ATE premium) in the sum of £77,197.80, and the Registrar duly issued an interim costs certificate in this amount.  Master Hurst also considered the reasonableness of the success fee claimed and the reasonableness of the ATE premium, leaving open the question whether these elements of the bill were recoverable at all.  On this basis he allowed them in the following amounts:
Success fee: 43%
ATE premium: £43,000
Although he thought the ATE premium was high, he allowed it in the absence of any evidence of a cheaper comparable policy.  He invited the Registrar to refer the question whether these items were recoverable at all to the Board for decision.
4.	Direction 7 of the Practice Direction (Taxation of Costs) which was issued by the Registrar in 2005 allowed for the possibility of the Board being invited to give directions if a Privy Council agent was acting or intended to act pursuant to a CFA.  The Board was told, however, that although some appeals have been successfully conducted under CFAs without any objection being taken, no application for directions pursuant to this Practice Direction has ever been made, and the respondent’s agents did not do so in the present case.  The question therefore arises for decision for the first time whether a successful party before the Board is entitled to recover a success fee and the reimbursement of an ATE premium which he would be entitled to recover if he had been successful in domestic litigation in the courts of England and Wales.
5.	To determine this question it is necessary first to say something about the Judicial Committee of the Privy Council and its historical origins.  These were helpfully described in the opinion given by Viscount Sankey LC in British Coal Corporation v King [1935] AC 500 at pp 512-3.
6.	As he explained, the Judicial Committee had its origins in the procedure whereby a party aggrieved by a decision of the Courts of the Channel Islands (and, later, by a decision of the Courts of the Plantations and Colonies) might petition the King in Council to exercise in his favour the sovereign’s royal prerogative as the fountain of justice.  In a domestic context such petitions were brought to the King in Parliament (being the origin of the judicial functions of the House of Lords which are soon to be abolished) or to the King in Chancery (from which flowed the jurisdiction of the Court of Chancery).
7.	The procedure for petitioning the King in Council had become loosely described as an appeal by the time the Judicial Committee Act 1833 was enacted. That Act created the Judicial Committee of the Privy Council as a statutory body.  It provided that “all appeals or complaints in the nature of appeals whatever” which had previously been brought before His Majesty in Council would now be referred by His Majesty to the Judicial Committee. Although the powers of the committee were limited to making a report or recommendations to His Majesty in Council, Viscount Sankey said that according to constitutional convention it was unknown and unthinkable that His Majesty in Council should not give effect to the report of the Judicial Committee “who are thus in truth an appellate court of law”.
8.	That case was concerned with the competency of a petition for special leave to appeal to the King in Council from a judgment of a court in Quebec in a criminal matter.  The petitioners argued that notwithstanding the provisions of a Canadian statute which prohibited such appeals, this class of appeal was external to Canada, so that the Canadian legislature had no power to make provision affecting it.  Viscount Sankey rejected this argument at pp 521-2:
“…[T]he reception and the hearing of the appeal in London is only one step in a composite procedure which starts from the Canadian court and which concludes and reaches its consummation in the Canadian Court.  What takes place outside Canada is only ancillary to practical results which become effective in Canada.  And the appeal to the King in Council is an appeal to an Imperial, not a merely British tribunal.”
It was for this reason that the Board held that the Canadian legislature had power to prohibit appeals to the King in Council in criminal matters and that the petition before it was therefore incompetent.
9.	Towards the end of his opinion Viscount Sankey quoted from the Report of the Imperial Conference in 1926 which stated at p 19 that “it was no part of the policy of His Majesty’s Government in Great Britain that questions affecting judicial appeals (i.e. to the Judicial Committee of the Privy Council) should be delivered otherwise than in accordance with the wishes of the part of the Empire primarily affected.”  Although the British Empire no longer exists, there was no hint in the submissions the Board received in the present case that this overall policy had changed in any way in relation to those countries of the Commonwealth from whose courts appeal still lies to the Privy Council.
10.	Twelve years earlier, shortly after the creation of the Irish Free State, the Board had been concerned with another question about the Judicial Committee’s essential character.  In Alexander E Hall & Co v Mackenna [1923] IR 402 Viscount Haldane said at pp 403-4:
“The Judicial Committee of the Privy Council is not an English body in any exclusive sense.  It is no more an English body than it is an Indian body, or a Canadian body, or a South African body, or, for the future, an Irish Free State body… I mention that for the purpose of bringing out the fact that the Judicial Committee of the Privy Council is not a body, strictly speaking, with any location. The Sovereign is everywhere throughout the Empire in the contemplation of the law.”
11.	The rules that govern the procedures of the Board are made by Her Majesty in Council and not under UK domestic legislation.  At the material time the Judicial Committee (General Appellate Jurisdiction) Rules Order 1982 (SI 1982/1876), as amended (“the 1982 Rules”), were still in force.  By Article 3 of the Judicial Committee (General Appellate Jurisdiction) Rules (Amendment) Order 2005 (SI 2005/1139) the original Rule 75 was repealed and replaced by a new Rule 75 which reads:
“75. Taxation of costs
(1) All bills of costs under the orders of the Judicial Committee shall be taxed by the Registrar, or such other person as the Judicial Committee may appoint.     
(2) The amount of costs which a party shall be entitled to recover shall be the amount allowed after taxation on the standard basis unless the Judicial Committee has expressly awarded costs on the indemnity basis or the poor person scale.   
(3) In no case will costs be allowed which have been unreasonably incurred or are unreasonable in amount.    
(4) On a taxation on the standard basis costs will only be allowed if they are reasonable and proportionate to the matters in issue and any doubt as to whether costs were reasonably incurred or are reasonable and proportionate in amount shall be resolved in favour of the party against whom the award of costs has been made ("the paying party").    
(5) On a taxation on the indemnity basis, any doubt as to whether costs were reasonably incurred or are reasonable in amount shall be resolved in favour of the party to whom costs have been awarded ("the receiving party").”
12.	Section 15 of the Judicial Committee Act 1833 (“the 1833 Act”) contains provision as to the incidence of costs in these terms:
“The costs incurred in the prosecution of any appeal … referred to the said Judicial Committee … shall be paid by such party or parties, person or persons, and be taxed by the aforesaid registrar, or such other person or persons, to be appointed by His Majesty in Council or the said Judicial Committee, and in such manner as the said Committee shall direct.”
13.	The costs with which the Board is now concerned were incurred in England.  If they had been incurred in Jamaica, the position would have been governed by Article 19 of the Jamaica (Procedure in Appeals to the Privy Council) Order in Council 1962 (SI 1962/1650) which provides:
“19. Costs in Jamaica
Where the Judicial Committee directs a party to bear the costs of an appeal incurred in Jamaica, such costs shall be taxed by the proper officer of the Court in accordance with the rules for the time being regulating taxation in the Court.…”
14.	The laws of Jamaica do not permit conditional fee agreements or allow for a successful party’s expenditure on an ATE premium to be an allowable disbursement.  In contrast Section 21 of the Legal Profession Act (No 15 of 1971) allows for contingency fee agreements in these terms:
“(1) An attorney may in writing agree with a client as to the amount and manner of payment of fees for the whole or part of any legal business done or to be done by the attorney, either by a gross sum or percentage or otherwise; so, however, that the attorney making the agreement shall not in relation to the same matters make any further charges than those provided in the agreement:
Provided that if in any suit commenced for the recovery of such fees the agreement appears to the court to be unfair and unreasonable the court may reduce the amount agreed to be payable under the agreement.
(2) Fees payable under any such agreement shall not be subject to the following provisions of this Part relating to taxation nor to any other provisions thereof.”
This provision, however, casts no light on the question whether success fees or ATE premiums are recoverable on a Jamaican appeal to the Privy Council, where the recoverability of costs is governed by the Privy Council’s own rules.
15.	The costs regime in the Privy Council runs along the following lines:
(1)	The Board has power to make a direction for “the costs incurred in the prosecution of an appeal” (1833 Act, s 15);
(2)	If the Board directs that costs shall be paid on the standard basis, they will only be allowed if they are reasonable and proportionate to the matters in issue (1982 Rules, r 75(4));
(3)	There is no Act of the Imperial Parliament or Order in Council which allows for the recovery of success fees or ATE premiums;
(4)	The addition of a success fee to a fee that is reasonable and proportionate is almost certain to render the resultant fee unreasonable and disproportionate;
(5)	Although the language of s 15 of the 1833 Act is very wide, it certainly does not embrace the recovery of a success fee;
(6)	Similarly, the expense of taking out of ATE insurance cover is not naturally to be regarded as part of “the costs incurred in the prosecution of [an] appeal” as opposed to the costs involved in protecting an unsuccessful party from having to pay the costs incurred by the other party in prosecuting the appeal.
16.	Finally, the Board would regard it as unthinkable that a CFA/ATE regime should be introduced into the taxation of costs incurred in appeals before it without any prior attempt to ascertain “the wishes of the [parts] of the [Commonwealth] primarily affected.”  In his final written submissions counsel for the appellant observed that the respondents’ lawyers had been inviting the Board to approve the payment of £61,820.66 in addition to their ordinary costs of £77,197.80.  He said: 
“These sums equate to J$9,149,457.68 and J$11,425,274.40 respectively at the current exchange rate of J$148 to £1.  These are fabulous sums of money for Jamaican litigants.”
It should be borne in mind that a liability to pay J$1.5 million damages (just over one eighth of the basic costs allowed by Master Hurst) was what was under challenge in this case.
17.	During the course of argument the Board was invited to consider the practice of the House of Lords in these matters.  The House of Lords has traditionally regarded itself as bound by convention to follow the costs practices of the part of the United Kingdom from whom an appeal is brought.  Moreover, so far as success fees are concerned, Direction 19.2 of the Practice Directions applicable to Civil Appeals in the House of Lords expressly provides that CFAs may properly be made by parties to appeals before the House of Lords and that it is open to the Taxing Officer to reduce the percentage uplift recoverable under a CFA if he considers it to be excessive.
18.	The courts of England and Wales have been permitting the recovery of success fees and ATE premiums following the intervention of Parliament in 2000 when sections 27 to 31 of the Access to Justice Act 1999 came into effect. Section 109(6) of that Act limits the extent of these provisions to England and Wales.  In the Costs Rules (which form part of the Civil Procedure Rules) success fees and ATE premiums are known as “an additional liability” and a CFA success fee is known as a “percentage increase” (CPR 43.2(1) (o) and (l)).  Section 11 of the Costs Practice Direction includes these provisions (CPR PD 44):
“11.5 In deciding whether the costs claimed are reasonable and (on a standard basis assessment) proportionate, the court will consider the amount of any additional liability separately from the base costs.
11.9 A percentage increase will not be reduced simply on the ground that, when added to base costs which are reasonable and (where relevant) proportionate, the total appears disproportionate.”
There is also provision in para 11.10 for the factors to be taken into account when deciding whether the cost of ATE insurance cover is reasonable.  Nothing at all comparable to these provisions appear in the 1982 Rules.
19.	The Board is of the opinion that House of Lords costs practice in domestic appeals cannot provide any solution to the question which it now has to decide.  The Board has explained in paragraph 15 above how Privy Council costs practice does not allow for the recovery of these additional liabilities.  The fact that the Registrar in 2005 prudently made provision in a practice direction for the Board to give directions if a Privy Council agent was acting or intending to act pursuant to a CFA cannot possibly be dispositive of this question.  
20.	For these reasons the Board will humbly advise Her Majesty that the 43% success fee and the £43,000 ATE insurance premium are not properly recoverable as part of the respondent’s costs in this appeal.