Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL Case No.  JR/3126/2011

ADMINISTRATIVE APPEALS CHAMBER

 

BEFORE LORD JUSTICE SULLIVAN, SENIOR PRESIDENT OF TRIBUNALS,  C M G OCKELTON, VICE PRESIDENT (IMMIGRATION AND ASYLUM CHAMBER) AND UPPER TRIBUNAL JUDGE WARD

 

Attendances:

 

For the Claimant: Mr Clive Newton QC (instructed by Sinclairs Law)

 

For the Defendant: No attendance or representation

 

For the Interested Party: Ms Sarah Hannett (instructed by County Solicitor)

 

 

Decision: There be no order for costs.

 

 

REASONS FOR DECISION

 

1. This case examines the correct approach to costs in certain judicial review cases heard by the Upper Tribunal.  To that extent, an issue of principle arises, hence the particular composition of the panel.  Whether in the present context “one size fits all” is among the issues we have to consider.  As will become apparent, our conclusion is that it does not.  So, while we have sought to give guidance which may assist beyond the immediate case, we caution against attempts to apply our decision more widely than the category of case with which it is concerned, as described in these reasons.  In particular, we do not address the situation on the “discretionary transfer” (see [9]) of a judicial review.

 

2. The substantive case reached the Upper Tribunal by way of a mandatory transfer from the Administrative Court under section 31A of the Senior Courts Act 1981 (see below).  On 21 May 2012 Judge Ward held a rolled-up hearing and on 21 June 2012 gave a decision ( [2012] UKUT 213 (AAC) ) granting the application for judicial review. 

 

3. The papers originally filed with the Administrative Court included an application for costs.  As to this, Judge Ward in his decision referred to the provisions contained in rule 10(5) of the Tribunal Procedure (Upper Tribunal) Rules 2008 SI 2008 No. 2698 (“the UT Rules”).  He indicated that he was not suggesting either that an application for costs should or should not be made but pointing out that if one did come to be made, a number of issues then unexplored in the caselaw of the Upper Tribunal would require to be addressed.  In due course an application compliant with rule 10(5) was made seeking costs from the interested party and a submission received from the interested party in response.

 

4. It is necessary briefly to explain what the substantive case was about.  The claimant’s parents had been in dispute with the interested party about the content of the claimant’s statement of special educational needs and, in particular, the school which should be named in it, as to which there had been a significant change of heart on the part of the local authority.  There had been a hearing before the First-tier Tribunal on 21 March 2011 at which reference was made to some of the legal issues arising, in particular from the local authority’s change of heart, and at which the claimant’s parents’ solicitor and the representative of the local authority had agreed to a consent order, which the First-tier Tribunal duly made.  Shortly afterwards, the interested party sought to re-open the approval of the consent order.  Thereafter a salaried Judge of the First-tier Tribunal reviewed the consent order and set it aside.  Such a decision was an “excluded decision” for the purposes of section 11 of the Tribunals, Courts and Enforcement Act 2007 (“the 2007 Act”) (see [11] below). The claimant’s parents consequently had no right of appeal to the Upper Tribunal and so any attack on the decision to set aside the consent order had to be pursued by way of judicial review.

 

5. We begin by examining the Upper Tribunal’s judicial review jurisdiction and comparing it with that in respect of statutory appeals.  We then look at the costs regimes  respectively applicable in the Upper Tribunal, First-tier Tribunal and Administrative Court.  We remind ourselves of the overriding objective and of work already done in this field by the Costs Review Group established by the previous Senior President of Tribunals, before turning to the submissions made to us.

 

The Upper Tribunal’s Judicial Review Jurisdiction

 

6. Section 15 of the 2007 Act provides as follows:

 

“(1) The Upper Tribunal has power, in cases arising under the law of England and Wales … to grant the following kinds of relief–

(a) a mandatory order;

(b) a prohibiting order;

(c) a quashing order;

(d) a declaration;

(e) an injunction.

 

(2) The power under subsection (1) may be exercised by the Upper Tribunal if–

(a) certain conditions are met (see section 18), or

(b) the tribunal is authorised to proceed even though not all of those conditions are met (see section 19(3) and (4)).

 

(3) Relief under subsection (1) granted by the Upper Tribunal–

(a) has the same effect as the corresponding relief granted by the High Court on an application for judicial review, and

(b) is enforceable as if it were relief granted by the High Court on an application for judicial review.

 

(4) In deciding whether to grant relief under subsection (1)(a), (b) or (c), the Upper Tribunal must apply the principles that the High Court would apply in deciding whether to grant that relief on an application for judicial review.

 

(5) In deciding whether to grant relief under subsection (1)(d) or (e), the Upper Tribunal must–

(a) in cases arising under the law of England and Wales apply the principles that the High Court would apply in deciding whether to grant that relief under section 31(2) of the Supreme Court Act 1981 (c. 54) on an application for judicial review… .”

 

7. Section 16 creates a requirement for permission to have been obtained from the Upper Tribunal.  Section 18 applies to applications for permission to bring judicial review proceedings and to those proceedings themselves.  It sets out four conditions which, if they are met, mean that the Upper Tribunal has the function of deciding the application.

 

“Condition 1 is that the application does not seek anything other than –

(a) relief under section 15(1);

(b) permission…to apply for relief under section 15(1);

(c) an award under section 16(6);

(d) interest;

(e) costs.”

(Section 16(6) allows the Upper Tribunal to award damages, restitution or recovery of a sum due provided – inter alia – the Upper Tribunal is satisfied that such an award would have been made by the High Court in an action started there.) 

 

“Condition 2 is that the application does not call into question anything done by the Crown Court.”

 

“Condition 3 is that the application falls within a class specified for the purposes of this subsection in a direction given in accordance with Part 1 of Schedule 2 to the Constitutional Reform Act 2005.”

(We return to such directions below.)

 

“Condition 4 is that the judge presiding at the hearing of the application is either –

(a) a Judge of the High Court or the Court of Appeal in England and Wales or Northern Ireland, or a Judge of the Court of Session, or

(b) such other persons as may be agreed from time to time between the Lord Chief Justice, the Lord President, or the Lord Chief Justice of Northern Ireland, as the case may be, and the Senior President of Tribunals.”

 

8. The direction referred to in Condition 3 most immediately relevant for present purposes was that made on 29 October 2008 by the Lord Chief Justice (see [2008] WLR(D)336) (“the 2008 Direction”), who directed that the following classes of case were specified for the purposes of section 18(6) of the 2007 Act:

 

”(a) any decision of the First-tier Tribunal on an appeal made in the exercise of a right conferred by the Criminal Injuries Compensation Scheme in compliance with section 5(1) of the Criminal Injuries Compensation Act 1995 (appeals against decisions on reviews); and (b) any decision of the First-tier Tribunal made under Tribunal Procedure Rules or section 9 of the 2007 Act where there is no right of appeal to the Upper Tribunal and that decision is not an excluded decision within paragraph (b), (c), or (f) of section 11(5) of the 2007 Act”.

 

The direction went on to exclude cases where an application seeks a declaration of incompatibility under section 4 of the Human Rights Act 1998. 

 

9. A judicial review case which met conditions 1 to 4 would therefore fall within the jurisdiction of the Upper Tribunal.  Indeed, some cases must be dealt with by the Upper Tribunal while others may be.  This arises as the result of section 19 of the 2007 Act which introduced a new section 31A into the Senior Courts Act 1981.  That section uses 5 conditions.  Conditions 1 to 3 are the same as those under section 18 (discussed above), while condition 4 excludes, and condition 5 specifies, various categories of decision in relation to immigration and nationality.  If conditions 1, 2, 3 and 4 are met, or if conditions 1, 2, 3 and 5 are met but condition 4 is not, the High Court is required by section 31A(2) and (2A) to transfer the application to the Upper Tribunal.  We refer to this as a “mandatory transfer”.  If conditions 1, 2 and 4 are met and condition 3 is not, the High Court may transfer the application of the Upper Tribunal “if it appears to the High Court to be just and convenient to do so”:  see section 31A(3).  We term this a “discretionary transfer”.

 

10. The conduct of judicial review proceedings in the Upper Tribunal is the subject of specific provision in Part 4 of the UT Rules.  Part 4 provides, inter alia, a right of oral renewal in all categories of judicial review handled by the Upper Tribunal where an application for permission is refused on the papers.

 

Rights of Appeal to the Upper Tribunal

 

11. Section 11 of the 2007 Act, so far as relevant, provides:

 

“(1) For the purposes of subsection (2), the reference to a right of appeal is to a right to appeal to the Upper Tribunal on any point of law arising from a decision made by the First-tier Tribunal other than an excluded decision.

 

(2) Any party to a case has a right of appeal, subject to subsection (8).

 

(3) That right may be exercised only with permission ….

 

(4) Permission … may be given by–

(a) the First-tier Tribunal, or

(b) the Upper Tribunal,

on an application by the party.

 

(5) For the purposes of subsection (1), an “excluded decision” is–

 

(a) any decision of the First-tier Tribunal on an appeal made in exercise of a right conferred by the Criminal Injuries Compensation Scheme in compliance with section 5(1)(a) of the Criminal Injuries Compensation Act 1995 (c. 53) (appeals against decisions on reviews),

 

(aa) any decision of the First-tier Tribunal on an appeal made in exercise of a right conferred by the Victims of Overseas Terrorism   Compensation Scheme in compliance with section 52(3) of the Crime and Security Act 2010,

 

(b) any decision of the First-tier Tribunal on an appeal under section 28(4) or (6) of the Data Protection Act 1998 (c. 29) (appeals against national security certificate),

 

(c) any decision of the First-tier Tribunal on an appeal under section 60(1) or (4) of the Freedom of Information Act 2000 (c. 36) (appeals against national security certificate),

 

(d) a decision of the First-tier Tribunal under section 9–

(i) to review, or not to review, an earlier decision of the tribunal,

(ii) to take no action, or not to take any particular action, in the light of a review of an earlier decision of the tribunal,

(iii) to set aside an earlier decision of the tribunal, or

(iv) to refer, or not to refer, a matter to the Upper Tribunal,

 

(e) a decision of the First-tier Tribunal that is set aside under section 9 (including a decision set aside after proceedings on an appeal under this section have been begun), or

 

(f) any decision of the First-tier Tribunal that is of a description specified in an order made by the Lord Chancellor

…”

 

Subsections (6)-(8) are immaterial for our purposes, save to note that there is a lengthy list of “excluded decisions”, principally if not entirely in relation to tax and immigration, contained within the Appeals (Excluded Decisions) Order 2009 SI 2009 No.275, made pursuant to the Lord Chancellor’s rule-making power under sub-section (8).  These are not within the terms of the 2008 Direction, as they fall within section 11(5)(f) of the 2007 Act.

 

12. As to sub-section (3), in the case of appeals to the Upper Tribunal, if permission to appeal is refused without a hearing, there is a right conferred by rule 22 of the UT Rules to renew the application at an oral hearing in the case of some tribunals, namely the Tax Chamber, the Health Education and Social Care Chamber (and the relevant tribunals in Wales dealing with mental health and special educational needs) and the General Regulatory Chamber.  There is no such right in the case of appeals from the Social Entitlement Chamber or the Immigration and Asylum Chamber. 

 

13. As to paragraph (d) of sub-section (5), section 9 of the 2007 Act confers upon the First-tier Tribunal powers of review, the extent of which in practice is significantly constrained by that tribunal’s rules of procedure.  It is not necessary to set out these provisions.  It is common ground that the First-tier Tribunal’s decision challenged in the main proceedings was a decision taken under section 9 and fell within the definition of “excluded decision” in section 11(5)(d).  With the aid of that piece in the jigsaw, one can see that the challenge fell within the 2008 Direction and thus that condition 3 was met.  As conditions 1, 2 , 3 and 4 under section 31A of the Senior Courts Act 1981 were also met, the Administrative Court had to transfer the application, which had been started there even though it could have been started in the Upper Tribunal, to the Upper Tribunal and it duly did so, with the consent of the parties.  Whether or not it is strictly the case that this was “an application made to the Upper Tribunal” within section 18(1), when it could have been and perhaps should have been, the parties are in agreement that section 18 applies to it.  All 4 of the conditions under that section were met.

 

The Upper Tribunal’s powers in relation to costs

 

14. Section 29 of the 2007 Act provides that:

 

“(1) The costs of and incidental to–

(a) all proceedings in the First-tier Tribunal, and

(b) all proceedings in the Upper Tribunal,

shall be in the discretion of the Tribunal in which the proceedings take place.

 

(2) The relevant Tribunal shall have full power to determine by whom and to what extent the costs are to be paid.

 

(3) Subsections (1) and (2) have effect subject to Tribunal Procedure Rules.”

 

It then goes on to make provision for “wasted costs”. 

 

15. Rule 10 of the UT Rules provides that:

 

“(1) The Upper Tribunal may not make an order in respect of costs (or, in Scotland, expenses) in proceedings transferred or referred by, or on appeal from, another tribunal except—

 

(aa) in a national security certificate appeal, to the extent permitted by paragraph (1A);

(a) in proceedings transferred by, or on appeal from, the Tax Chamber of the First-tier Tribunal; or

(b) to the extent and in the circumstances that the other tribunal had the power to make an order in respect of costs (or, in Scotland, expenses).

 

(1A) [Deals with national security certificate appeals]

 

(2) [Deals with cases under section 4 of the Forfeiture Act 1982.]

 

(3) In other proceedings, the Upper Tribunal may not make an order in respect of costs or expenses except—

 

(a) in judicial review proceedings;

[...]

(c) under section 29(4) of the 2007 Act (wasted costs) and costs incurred in applying for such costs;

(d) if the Upper Tribunal considers that a party or its representative has acted unreasonably in bringing, defending or conducting the proceedings ; or

(e) if, in a financial services case, the Upper Tribunal considers that the decision in respect of which the reference was made was unreasonable.”

 

The rule then goes on to make procedural provisions.

 

Costs in the First-tier Tribunal

 

16. Once again, the enabling power is to be found in section 29 of the 2007 Act, set out at [14].  In terms of the Chamber from which the present case comes, the Tribunal Procedure (First-tier Tribunal) (Health Education and Social Care Chambers) Rules 2008 SI 2008 No. 2699 (“the HESC Rules”) provide by rule 10 that

 

“(1) Subject to paragraph (2), the Tribunal may make an order in respect of costs only –

 

(a) under section 29(4) of the 2007 Act (wasted costs); or

(b) if the Tribunal considers that a party or its representative has acted unreasonably in bringing, defending or conducting the proceedings.

 

(2) The Tribunal may not make an order under paragraph (1)(b) in mental health cases. 

…”

 

By virtue of the terms of the Upper Tribunal’s rule 10(1)(b) the limitations imposed by the HESC Rules on the First-tier Tribunal’s power to award costs also constituted a limitation on the Upper Tribunal’s power on an appeal to it from that chamber.

 

17. Other chambers of the First-tier Tribunal have different approaches to costs.  The General Regulatory Chamber has a similar test to the Health Education and Social Care Chamber, while also making further express provision to deal with matters peculiar to its jurisdiction.  The Immigration and Asylum Chamber has no power to make an order for costs except for a limited power to require the State to reimburse the fees recently introduced on immigration appeals, where those appeals prove successful.  The Social Entitlement Chamber has no power to make an order for costs and nor has the War Pensions and Armed Forces Compensation Chamber.  In the Tax Chamber, while there are provisions based on wasted costs and unreasonable conduct, there are also further provisions which recognise that certain categories of complex case may be appropriate for an award of costs, unless the individual involved has opted to be excluded from such a regime.  As can be seen from rule 10(1)(a) of the UT Rules, proceedings emanating from the Tax Chamber are something of a special case so far as the power to award costs in the Upper Tribunal is concerned.

Costs in judicial review in the High Court

 

18. These are governed by Rule 44 of the Civil Procedure Rules (“CPR”).  Rule 44(3) provides that

 

“(1)The court has discretion as to –

 

(a) whether costs are payable by one party to another;

(b) the amount of those costs; and

(c) when they are to be paid.

 

(2) If the court decides to make an order about costs –

 

(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but

(b) the court may make a different order.

…

(4) In deciding what order (if any) to make about costs, the court must have regard to all the circumstances, including –

 

(a) the conduct of all the parties;

(b) whether a party has succeeded on part of his case, even if he has not been wholly successful; and

(c) [not material].

…”.

 

It would be a little misleading to fail to point out that even within such a regime, other competing factors may on occasion mean that a successful claimant will not recover costs:  for instance, a defendant may be a tribunal and play no part (see further R (Davies) v HM Deputy Coroner for Birmingham (No 2) [2004] EWCA Civ 207.)

 

The overriding objective

 

19. Rule 2 of the UT Rules provides that:

 

“(1) The overriding objective of these Rules is to enable the Upper Tribunal to deal with cases fairly and justly.

 

(2) Dealing with a case fairly and justly includes—

 

(a) dealing with the case in ways which are proportionate to the importance of the case, the complexity of the issues, the anticipated costs and the resources of the parties;

(b) avoiding unnecessary formality and seeking flexibility in the proceedings;

(c) ensuring, so far as practicable, that the parties are able to participate fully in the proceedings;

(d) using any special expertise of the Upper Tribunal effectively; and

(e) avoiding delay, so far as compatible with proper consideration of the issues.

 

(3) The Upper Tribunal must seek to give effect to the overriding objective when it—

 

(a) exercises any power under these Rules; or

(b) interprets any rule or practice direction.

…”

We note that the overriding objective for tribunals is in different terms from the equivalent provision of the CPR.

 

The “Costs in Tribunals” Report

 

20. At the request of the previous Senior President of Tribunals, a group (“the Costs Review Group”) was established to carry out a review of the costs regimes applicable in tribunals operating in England and Wales.  Its terms of reference were:

 

(a) To consider and review the provisions of Tribunal Rules relating to costs, particularly in the light of Lord Justice Jackson’s review of civil litigation costs; and

 

(b) To produce a report for the Senior President of Tribunals, making recommendations for any changes to the Tribunals costs regime in order to promote access to justice in Tribunals.

 

The Costs Review Group reported in December 2011.  Its recommendations have not been adopted and are under consideration by the Tribunal Procedure Committee.  Reference is made to the report at various points hereafter.

 

The issues for decision

 

21. Against that background, we turn to the issues in the present case.  They may be summarised as follows:-

 

(1). What principles should apply to the power to award costs in a case such as this?  As part of this, do those principles apply only in relation to the  category of case with which we are concerned, namely where judicial review is sought of the decision of the First-tier Tribunal and (under section 18 of the 2007 Act and section 31A of the 1981 Act) only the Upper Tribunal has jurisdiction in respect of it, or is the relevant principle of wider application?

 

(2). If the answer on issue (1) is that the Upper Tribunal should apply the same principles as the High Court would (i.e. under CPR 44.3) (which we term “costs-shifting”), how should those principles be applied in the circumstances of this case?

 

(3). If the decision on issue (1) is that other principles apply, how do they fall to be applied in this case?

 

It was common ground that if we were to make an order for costs, we should direct that the costs be assessed, thus we do not here concern ourselves with particular matters of detail in relation to the conduct of this litigation.

 

Issue (1)

 

22. Mr Newton QC invites us to conclude that the provision made by the UT Rules for judicial review and specifically in relation to the costs thereof is different from that made in relation to appeals, and advisedly so.  He invites us to conclude that the principles which we should apply in exercising the discretion under section 29 of the 2007 Act are those which the High Court would apply under CPR 44.3.  Such is, he submits, consistent with the aim of promoting access to justice, in that judicial review, typically more so than a statutory appeal, is an area where parties may require the professional assistance of lawyers and persons of modest means may be deterred from exercising their rights if they are unable to recover through costs-shifting the costs of successfully doing so.  In making this submission, Mr Newton does not seek to distinguish between the various types of judicial review which may come before the Upper Tribunal.  Whether the cases involve a challenge to the initial decision‑maker or to a tribunal and whether the Upper Tribunal exclusively has jurisdiction or whether it only does so following a discretionary transfer from the High Court so that the jurisdictions are, in effect, concurrent, are not, he says,  distinctions that are material for the purposes of his argument.

 

23. Ms Hannett does not put forward a submission directed to all types of judicial review which may reach the Upper Tribunal but only to those such as this case where it is the First‑tier Tribunal whose decision is being challenged, rather than an initial decision-maker, and only to those cases where solely the Upper Tribunal has jurisdiction.  She invites us to conclude that it is appropriate to apply in judicial review cases of the defined type, as a general rule, the same principle as would apply on appeals to the Upper Tribunal, namely that costs should only be awarded where they could be awarded by the tribunal below.  This in her submission would be consistent with the “overriding objective” and indeed with the views expressed in the Costs in Tribunals report.  Such a principle is, she submits, tightly drawn, flexible, and consistent and thus appropriate to apply.

 

24. She submits that the legislative framework does not require costs-shifting to be adopted.  There are good reasons not to do so. It would represent a barrier to justice. It is not needed in order to deter unmeritorious claims, because of the requirement for permission in judicial review claims.  It is generally undesirable to bring in the principles of the CPR to the tribunal system.  Though there are differences between appeals and judicial review, in a tribunal context the differences are not as important as the similarities.  

 

25. We prefer Ms Hannett’s submission.  Section 29(3) directs us to the UT Rules and in particular rule 10.  Under that rule certain categories of case, such as national security certificate appeals, cases originating in the Tax Chamber and references under section 4 of the Forfeiture Act 1982 are the subject of specific rules and we say no more about them.  On a general level, the key provisions are rule 10(1)(b) and rule 10(3).  The former precludes the Upper Tribunal from making an award of costs in proceedings

 

“transferred or referred by, or on appeal from, another tribunal except … to the extent and in the circumstances that the other tribunal had the power to make an order in respect of costs…”

 

Under rule 10(3) “judicial review proceedings” (without distinction) are one of a very limited number of carve-outs from a prohibition on making an order for costs in other proceedings.  We readily accept that the terms of rule 10(3) do not preclude us from applying costs-shifting, but in our judgment nor do they require it.  This view is consistent with that expressed by the Costs Review group in their report at [139].  It is true, as Mr Newton submits, that those responsible for drafting the rules could readily have provided similar limitations on the power to award costs in judicial review as they did in relation to appeals and have latterly done in respect of cases transferred or referred also.  We accept, too, that the failure to do so means that it would be possible to order costs on a judicial review emanating from a tribunal where the award of costs was precluded.  However, we do not consider that it follows that the intention of the rule makers was to require cost-shifting in every category of judicial review case.  Of the categories of judicial review falling within the Lord Chief Justice’s Practice Direction of 29 October 2008, the preference of the legislature for judicial review as the appropriate remedy appears to be based upon either a policy choice (as in the case of challenges to the First‑tier Tribunal in criminal injuries matters) or in the view of the legislature, expressed in the 2007 Act through the categories of “excluded decisions”, that certain categories of decision, typically at the end of a piece of litigation, should be challengeable, thus preserving consistency with the rule of law, but only by the slightly more difficult route that an application for judicial review might have been perceived to represent compared with an appeal.  All these categories however, are intrinsically linked with the tribunal process.

 

26. There are however categories of judicial review which may come to be heard by the Upper Tribunal which have no such link, such as cases challenging the Secretary of State’s refusal to accept submissions as a “fresh” asylum claim, allocated to the Immigration and Asylum Chamber by a further direction by the Lord Chief Justice, operative with effect from 17 October 2011, which are challenges direct to the original decision-maker.  Further, in the case of discretionary transfers from the Administrative Court there may be any number of reasons for them, among which practical convenience and the specialist expertise of the Upper Tribunal in particular areas might be expected to figure.  Our view is that the framers of the UT Rules were trying to keep options open and to avoid being over‑prescriptive in the light of the diversity of judicial reviews which could reach the Upper Tribunal, as indeed is increasingly coming to pass. 

 

27. Mr Newton submits that it would be odd to adopt the principle for which Ms Hannett contends in that it would, for instance, preclude the Upper Tribunal from making a wasted costs order in judicial review cases originating from tribunals whose rules do not, at any rate in terms, allow them to do so.  While there may be unexplored issues around the interaction between section 29(4) and the rules of some of chambers, we do not feel the need to explore them here.  Whatever the position is with regard to judicial review cases coming to the Upper Tribunal from such chambers, it is also the case in relation to the far more numerous category of statutory appeals and does not appear to cause difficulty, thus we attach little weight to the point.

 

28. We do not agree with Mr Newton that costs-shifting would be likely to promote access to justice in the category of cases with which we are concerned.  The cases are typically citizen–State disputes in which the State will typically have a much deeper pocket.  It is a jurisdiction in which, while there are certainly cases which benefit immeasurably from professional legal input, parties should, at least in the majority of cases, be able to represent themselves or to have lay representatives, and in which the Upper Tribunal will, so far as it properly may, seek to adopt an enabling and facilitative role consistent with the overriding objective.  Parties each have much more immediate and direct control over the resources devoted to their own case than over those devoted to the other side’s.  If they do not wish, or are not in a position, to commit financial resources to the preparation of their own case, they can commit their own resources of time and effort.  By contrast the resources devoted by the State defendant/respondent can only be controlled through a process, unfamiliar to an individual claimant/appellant, of assessment of costs by, or at the instigation of, the Upper Tribunal after the event.  In a regime without costs-shifting, individual parties (who are likely to be on unfamiliar territory in having to decide whether to pursue their rights before a tribunal at all), will have the knowledge that, in general, if they have second thoughts as the case develops, they are likely to be able to withdraw without penalty; in a costs-shifting regime, taking that first step potentially has greater financial consequences.  We note that our conclusions in this regard are consistent with the views expressed by the members of the Costs Review Group, all of them experienced in the work of tribunals, at paragraph 10 of their report that:

 

“In the vast majority of cases with which the Tribunals deal, the views of judiciary and users’ representatives is that access to justice is promoted by the general absence of costs-shifting (although there is a significant body of contrary opinion in relation to some tax cases, to which we will come later).  Certainly, where the appellant or applicant is acting in person, it is easy to see that he or she will be deterred from approaching the tribunal if there is a risk of an adverse costs order.”

 

29. We do not accept that the differences between judicial review and statutory appeals are as significant as Mr Newton invites us to conclude.  Some of the additional complications there may be perceived to be can be mitigated in the tribunal context, for example by the use of forms designed to guide the unrepresented claimant through the information he or she needs to provide.  In our view, the differences come down to (a) the impossibility of applying to the First-tier Tribunal for permission to bring judicial review proceedings when this is possible in the case of an appeal; (b) the need for applications for permission to be served on the other parties to give them the opportunity to respond and, if they see fit, to be represented at any permission hearing; (c) the wider range of relief that may be given (though in the type of case with which we are concerned, the likelihood of anything substantive other than a quashing order and/or declaration being sought is slight); and (d) the greater restriction in judicial review on when the Upper Tribunal may substitute its own decision.  However, for the purposes of identifying whether there has been an error of law in a tribunal’s decision for a statutory appeal and whether there are grounds for intervention by way of judicial review, “it has become a generally safe working rule that the substantive grounds for intervention are identical” (see E v Secretary of State for the Home Department [2004] EWCA Civ 49; [2004] QB 1044).  We therefore see no relevant distinction between the two procedures in terms of the access to justice considerations canvassed in the previous paragraph, nor anything intrinsic in their respective natures which would lead one to conclude that the makers of the UT Rules were intending to require costs-shifting to be adopted as the appropriate principle in all categories of judicial review before the Upper Tribunal.

 

30. We also consider that it is generally right to be wary of reading concepts from the CPR into Tribunal Procedure Rules.  The 2007 Act provides in section 22 and schedule 5 for the structures and procedure for making rules as to the practice and procedure to be followed in the First-tier Tribunal and Upper Tribunal, provisions which are distinct from those applicable to the CPR.  It is desirable that tribunal users can look at one set of rules and know where they stand, without the risk of other provisions being read in by analogy from other sources.  If those who make Tribunal Procedure Rules wish to mirror the CPR, there is nothing to prevent them from doing so expressly.  Of course, there may sometimes be questions of mechanics for dealing with a particular procedural problem where Tribunal Procedure Rules are silent and a workable solution has been devised under the CPR which it is equally sensible to apply in the tribunal context.  But as to principles, we can readily understand, and endorse, the reluctance of the three judge panel, presided over by Walker J, CP, in CB v Suffolk CC (Enforcement Reference) [2010] UKUT 413 (AAC); [2011] AACR 22 at [22] to import extraneous principles from the High Court  into decisions of the Upper Tribunal in contempt proceedings and of Black J and Upper Tribunal Judge Turnbull, respectively in R(Howes) v Child Support Commissioners [2007] EWHC 559 and R(CD) v First-tier Tribunal [2010] UKUT 181 (AAC), to do so in relation to decisions of the First-tier Tribunal (or its predecessor) in relation to whether to extend time and we are similarly cautious in the context with which we are concerned.

 

31. Further, we consider that as regards costs in judicial review, Parliament itself has given a number of clear indications that the Upper Tribunal was not to be constrained to follow the practice of the High Court.  For instance, sub-sections (4) and (5) of section 15 of the 2007 Act (see [6] above) require the Upper Tribunal to follow the same principles as the High Court in granting a mandatory order, prohibiting order, quashing order, declaration or injunction.  Section 16(6) (see [7] above) requires High Court principles to be followed in relation to claims for damages, restitution or recovery of a sum due.  Of the relief which the Upper Tribunal is authorised to grant if condition 1 is to be fulfilled, there is no equivalent provision in the 2007 Act requiring High Court principles to be followed either in relation to interest or costs.

 

32. We note that the Costs Review Group at [194] of its report listed among its “recommendations [which] would require amendments only to Tribunal Procedure Rules” the recommendation that

 

“in judicial review proceedings against the F-tT or other lower tribunal, the costs regime in the UT should be the same as in the relevant chamber or tribunal, save in tax cases… .”

 

We do not read this as saying that the Upper Tribunal is presently precluded from applying a principle other than costs-shifting, but rather as recognising that at present there is a very wide discretion, which could be reduced only by an amendment to the UT Rules.

 

33. We agree with Ms Hannett that the principle for which she contends is apt to give effect to the overriding objective.  Specifically we consider that the ability of parties to mange their own costs and other resources, without in general the risk of being found liable for the other party’s, is “proportionate to the resources of the parties” (sub-paragraph (a) of UT Rule 2(2)) and, critically, “ensur[es], so far as practicable, that the parties are able to participate fully in the proceedings” (sub-paragraph (c)).  We consider that it also “seek[s] flexibility in the proceedings (sub-paragraph (b)), in that judicial reviews falling within limb (b) of the 2008 Direction not infrequently arise as an almost incidental part of a challenge begun by way of statutory appeal when it emerges that the matters complained of, or commonly one part of them, concern an “excluded decision” and so have to be pursued by way of judicial review.  In such a case it would be odd if the aspects concerning the “excluded decision” could not be brought before the Upper Tribunal save by subjecting the parties to a significantly different costs regime.

 

34. Thus, in conclusion on this aspect, our view is  that the failure of the UT Rules to include express provision restricting the ability of a party in judicial review proceedings to claim costs to where they could have been claimed in the tribunal below should not be taken as indicative of a positive view that costs-shifting was to be applied.  We acknowledge that the relevant principles may be different in categories of judicial review which are not before us, but as regards those where it is the First‑tier Tribunal whose decision is being challenged, rather than an initial decision-maker, and where the case is of a category where the Upper Tribunal has exclusive jurisdiction, we conclude that, as a general rule, and subject to [36] below, the appropriate basis for applying the Upper Tribunal’s discretion under section 29 is that it should not do so to make an award of costs where the tribunal below would have had no power to do so.

 

35. We see no reason to depart from that general principle in the present case.

 

36. The proviso to which we referred in [34] is that we are aware of the proposal to transfer immigration judicial review cases from the Administrative Court to the Immigration and Asylum Chamber of the Upper Tribunal and we leave the costs principles to be applied in those cases for that Chamber to determine in an appropriate case.

 

Issue (2)

 

37. Our conclusions on issue (2) are academic in the light of the conclusion we have reached on issue (1). It was part of the interested party’s case that if (contrary to the primary submission made on its behalf) costs-shifting were found to be appropriate, an issue-based approach should be taken, in that there were three issues in the case, of which the claimant succeeded on one, failed on another and the third did not need to be decided upon, and thus that the claimant should not be awarded his costs on all those issues.  Mr Newton argues that it is an over-simplification for the purpose of costs to reduce the number of issues to three.  This is not a matter on which we need to dwell.  In our view, all the issues related, properly, to the same underlying matter, on which the claimant succeeded, and we would not have regarded the case as appropriate for an issue-based approach to costs, were costs-shifting principles to apply.

 

Issue (3)

 

38. Applying the principles we have held under issue (1) to be relevant to the exercise of our discretion under section 29, under rule 10(1)(b) of the HESC Rules the First-tier Tribunal could only have made an order for costs if it considered ”that a party or its representative has acted unreasonably in bringing, defending or conducting the proceedings.”

 

39. Mr Newton submits that the interested party did indeed act unreasonably in making the application for the setting aside of the First-tier Tribunal’s decision approving the agreement which its representative before the First-tier Tribunal had entered into, thereby resulting in the present judicial review to quash the decision which had wrongly granted the set-aside.  He relies primarily on a number of points within Judge Ward’s substantive decision as showing that the authority’s representative was out of her depth, notably (a) in misunderstanding the content of remarks in the First-tier Tribunal concerning the impact of section 316 of the Education Act 1996 in the light of the authority’s change of heart as to the appropriate school for the claimant, leading to a misguided assertion or belief that a ruling had been made on section 316 when, as the judge held, it had not; and (b) in misunderstanding the First-tier Tribunal judge’s remarks when he was properly exploring with the parties the extent to which it might be feasible for the case to be disposed of by consent.  The interested party, he submits, unreasonably relied on the false perceptions by the original representative in pursuing the subsequent application to the First-tier Tribunal and then in defending the judicial review which became necessary in order to secure that the consent order was upheld, thereby compounding their effect.

 

40. The test for unreasonable conduct in this context is set out in Ridehalgh v Horsefield [1994] Ch 205 at 232, as applied in HJ v London Borough of Brent (SEN) [2011] UKUT 191 (AAC), where Upper Tribunal Judge Jacobs said at [7]:

 

“The meaning of ‘unreasonable’ was discussed by the Court of Appeal in Ridehalgh v Horsefield [1994] Ch 205 at 232:

‘“Unreasonable" also means what it has been understood to mean in this context for at least half a century. The expression aptly describes conduct which is vexatious, designed to harass the other side rather than advance the resolution of the case, and it makes no difference that the conduct is the product of excessive zeal and not improper motive. But conduct cannot be described as unreasonable simply because it leads in the event to an unsuccessful result or because other more cautious legal representatives would have acted differently. The acid test is whether the conduct permits of a reasonable explanation. If so, the course adopted may be regarded as optimistic and as reflecting on a practitioner's judgment, but it is not unreasonable.’

The Court was there concerned with wasted costs, but the reasoning is equally applicable to unreasonable conduct. “

 

41. Whilst we accept in the light of Judge Ward’s decision that the representative appears to have been somewhat out of her depth in what was a far from straightforward case, we would be reluctant to foster a climate where non-legally qualified representatives who found themselves in such a position were exposing their clients to a risk of costs.  Both claimants/appellants and State defendants/respondents in tribunals are substantially dependent on representatives who present cases to the best of their ability, often very helpfully, and that is not something which it would be right to discourage merely because it has not gone smoothly on this particular occasion.  We acknowledge that just because things had gone wrong in the First-tier Tribunal did not mean that the interested party then had to go on to try to unscramble the agreement reached.  But the correct reading of what had occurred in the tribunal, particularly in relation to the section 316 issue, was far from self-evident and was arrived at by Judge Ward only after only after the fairly close reasoning in [32] to [42] of his substantive decision.  A party being wrong or misguided is not the same as being unreasonable.  Whilst we can understand the frustration of the claimant’s parents at the situation in which they found themselves, we therefore find that the conduct of the interested party or its representative cannot be categorised as unreasonable for the purpose of rule 10 of the HESC Rules and so for the purposes of the principles we are applying under section 29 of the 2007 Act.

 

42. It follows that our decision is to make no order for costs.

 

 

 

 

Lord Justice Sullivan

 Senior President of Tribunals

 

 

 

C M G Ockelton

 Vice President,

 Upper Tribunal (Immigration and Asylum Chamber)

 

 

 

Upper Tribunal Judge Ward

 

25 June 2013