Costs issues regularly arise in the context of judicial review proceedings. Often, as the claimant is financed by the Legal Services Commission, the issue is not considered pivotal. However, given the significant financial costs in bringing the proceedings, this is problematic. In current climate of extensive budget cuts the issue of costs in judicial review proceedings is likely to become a hot topic, particularly as the government departments are appearing to develop a practice to consider and settle claims on the dawn of the permission hearing.
The most important provision in relation to costs is section 51 of the Supreme Court Act 1981, which provides the court full discretion to determine the issue of costs, subject to enactments and rules of court. There are various provisions in the CPR and practice directions that are relevant to the issue of costs in judicial review proceedings, however there is no enactment removing the discretion granted by the Act.
CPR 44.3 confirms that the court has discretion to order one party to pay the costs, the amount of those costs and when they are to be paid. It is well known that the general rule provides that the unsuccessful party will be ordered to pay the costs of the successful party; however the court may decide to make a different order.
When considering the issue of costs the court must have regard to all the circumstances of the case, but in particular to the conduct of the parties and whether a party has succeeded in part of the claim. The conduct in this context means whether the parties have followed any relevant pre-action protocol to try to settle the proceedings and the manner in which they have pursued or defended the case.
Paragraphs 8.5 and 8.6 of Practice Direction 54A relate to the permission hearing and clarify that the defendant or other interested party do not need to attend a hearing on the question of permission unless the court directs otherwise. Additionally where the defendant or any party does attend a hearing, the court will generally not make an order for costs against the claimant.
Costs are usually not considered when the Administrative court decides that permission should be granted. This can be because the cost issue can be dealt with at the substantive hearing, but more likely because the order is silent in relation to costs it is deemed to contain an order for costs in the case.
Where permission is refused, if the Defendant expressly asks for costs, the Claimant may have to pay some of the Defendant’s costs but usually limited to the costs of preparing the Acknowledgment of Service.
As the reader may recall, a few months ago we reported on an important judicial review challenge, on the case of S v SSHD, relating to delays on the part of UK Border Agency to resolve priority applications under the ‘Legacy Exercise’. Duncan Lewis acted for S, a minor who had made an application for extension of his discretionary leave. The application had been held up since 2006 despite clearly qualifying within the Secretary of State’s published criteria as to which applications in the legacy exercise should be considered as a priority. Click here to see previous article on of the UK Border Agency’s Legacy Exercise in disarray.
S, having arrived in the United Kingdom when he was merely 8 years old, had been recognised by his local Championship football team as having exceptional professional prospects in the game. The delay seriously prejudiced S chances to develop to his full potential and it was clear from the circumstances of the case that the Secretary of State had failed to apply its policy. Duncan Lewis had, in accordance with the pre-action procedure, written to the Secretary of State trying to settle the claim but the UK Border Agency was not prepared to prioritise his matter. However on the day before the permission hearing the Secretary of State granted the Claimant indefinite leave to remain in the United Kingdom. The Secretary of State takes the view that the claim has been settled at an early stage and proposes no order as to costs.
Unfortunately it is far from uncommon that the Secretary of State, in judicial review proceedings relating to delay, permission to work, right of appeal etc proposes to settle the claim shortly before the hearing. Through the pre-action procedure the Secretary of State is provided the opportunity to consider taking action before the Claimant is forced to commence proceedings. It appears however that the Secretary of State systematically fails to consider the claims early. Giving significance to the claim only when faced with immediate oral hearing incurs unnecessary public expense.
Having settled the claim pre-permission, as a routine the Secretary of State refuses to pay the Claimants costs. In cost submissions the Secretary of State relies on the principles in Boxall v Mayor and Burgess of the London Borough of Waltham Forest (2001) CCLR 258 where at paragraph 22 Scott Baker J provided some guidance as to costs in proceedings that conclude prior to a substantive hearing, either because they are settled with consent or where the decision under challenge is either withdrawn or altered.
The Secretary of State regularly emphasizes only parts of comments made by Scott Baker J where he notes that in the absence of a good reason to make any other order, the fall back is to make no order as to costs. Secondly the Secretary of State highlights that the court should take care to ensure that it does not discourage parties from settling judicial review proceedings for example by a local authority making a concession at an early stage.
However Scott Baker J underlined also that the court has the power to order costs where the matter has been resolved without a hearing. He emphasized that it should be irrelevant that one party is LSC funded as the overriding objective is to do Justice to the parties without incurring unnecessary time and costs. Baker J noted moreover that at each end of the spectrum there will be cases where it is obvious which side would have won had the substantive issues been fought to a conclusion. In between the position will be less clear to a varying extent. He underlined that how far the court will be prepared to look into the previously unresolved substantive issues will depend on the circumstances of the particular case, not least the amount of costs at stake and the conduct of the parties.
Clearly therefore as we report there can be discerned a practice whereby the Secretary of State fails to respond to the pre-action correspondence or refuses to reconsider the administrative decision. Through this practice the Secretary of State undermines the purpose of the pre-action procedure and in effect of the Civil Procedure Rules.
It is also important to bear in mind that the failure of a litigant to obtain a costs order against another party may have serious consequences. As initially mentioned judicial review proceedings are expensive and many litigants, despite having meritorious claims, are discouraged from challenging the authorities because of the risk that they will not be able to recover their costs. Also for a legally aided litigant a failure to obtain a costs order against another party may have serious consequences. This is because, as is commonly known, the Legal Service Commission’s budget is limited and provision of costs orders in successful claims refunds the Commission’s expenditure and assists the funding of other meritorious claims.
Clearly therefore the Secretary of State’s practice fail