The Court of Appeal in the case of Bahta, a case 'of general application'1, criticised the approach of Administrative Court Judges to relief and costs and forcefully restated the principle that their judgments represent the law until and unless they are overturned. Their Lordships gave revised guidance to the correct interpretation of the Boxall2 principles while emphasising the need to abide by the pre-action protocol in judicial review cases. The case also represents a landmark recognition of the duties of the courts to legally aided practitioners.
Background
The lead case on costs where a claim for judicial review settles before a full hearing is Boxall, well known to judicial review practitioners. The key principles in Boxall are: (i) the court has power to make a costs order when the substantive proceedings have been resolved without a trial but the parties have not agreed about costs.(ii) it will ordinarily be irrelevant that the Claimant is legally aided;(iii) the overriding objective is to do justice between the parties without incurring unnecessary court time and consequently additional cost;(iv) 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, in differing degrees, be less clear. 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.(v) in the absence of a good reason to make any other order the fall back is to make no order as to costs.(vi) 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.
These principles had come to be interpreted by a number of judges in the Administrative Court as virtually amounting to a licence for Defendants to await a decision on permission and then, if permission is granted, concede the relief requested but claim that they were doing so for 'pragmatic reasons' and resist costs. Duncan Lewis represented the five Appellants who in joined cases appealed against orders refusing them their costs on similar bases.
Jackson LJ in his Review of Civil Litigation Costs: Final Report recognised that there was widespread concern and recommended an amendment to the Boxall principles. In the light of the importance of the issue to the profession generally and legally aided practitioners in particular the Public Law Project and the General Council of the Bar were granted permission to intervene.
The history of the claims for judicial review
The circumstances of these appeals as to costs illustrate the extent of the latitude Defendants were being given in judicial review proceedings. In each of the claims for judicial review the Claimant had sought permission to work ('PTW'). In four of the cases the Claimant relied upon the decision of the Court of Appeal in ZO3. In brief4 that case concerned the right of asylum seekers to access the employment market if their claim for asylum had been outstanding for more than one year before a decision was made on the application. This right was not in dispute as such, but the Secretary of State had held that it only applied to those making a first claim for asylum. The Court of Appeal in ZO held that it applied equally to those making subsequent claims. Nonetheless the Secretary of State either ignored or outright refused the applications for permission to work by these Claimants, and when proceedings for judicial review were instigated defended the claims on the basis that he was hoping to overturn the Court of Appeal's decision in ZO in the Supreme Court. In the fifth case, KD, the Claimant was in fact making his first claim for asylum, but the Defendant wrongly believed that it was a subsequent claim, apparently through oversight, and defended the claim on the same basis.
The Supreme Court heard the case of ZO, but dismissed the appeal of the Secretary of State holding that the argument of the Secretary of State could not be accepted 'on any conventional basis of reasoning'5. By this stage the Appellants, with the odd exception of poor KD who even on the Secretary of State's own case ought never have been denied PTW, had been granted PTW or Indefinite Leave to Remain (and therefore no longer required a grant of PTW). KD too was eventually granted PTW a couple of months later6. In each of the cases the judicial review claim had therefore become academic before the matter had been decided at a substantive hearing.
In each case the Claimant had agreed that the claim for judicial review should be withdrawn, but requested his costs, pointing out that no aspect of the case of the Defendant had been upheld. The Defendant however refused to agree to meet these costs and the parties agreed that the issue of costs would be settled following written submissions to the High Court.
Jurisdiction
The Court of Appeal first considered whether it had jurisdiction to hear the appeal. There had been a suggestion that the recent decision of the court of Appeal in RS7 was a bar to the hearing of the appeal.
In RS the parties to an appeal in the Court of Appeal had agreed that the issue of costs would be settled by written submissions. It was held that the agreement precluded the disappointed party from seeking to re-open the question at an oral hearing in the same court. The Court of Appeal held that an Order in respect of costs is a final order and appealable in the ordinary way.
The revised approach to Boxall
(a) The relevant date for assessment of the merits of the claim
One of the issues between the parties was the relevant date for assessing the strength of the claim. The Appellants contended that the relevant date was that upon which the assessment took place, the Respondent that it was the situation at the commencement of proceedings, while in the cases under appeal some of the judges had adopted yet other dates such as the date the claim was adjourned or the date the claim was withdrawn save as to costs submissions.
It is perhaps surprising that this was in issue, given the earlier authority of Mendes8 which had held, though without detailed consideration of principles, that the question of who was the likely victor had matters proceeded to a final hearing was to be considered in the light of all the information available when costs were being assessed. In this case the significance was that in each case had the costs been assessed on that basis it was beyond argument that the Claimants would have won in the light of the decision of the Supreme Court in ZO, but not, in the mind of the judges, at the earlier date they had considered relevant.
The question is now decided beyond dispute with the decision in Mendes upheld.
(b) The Jackson report, the pre-action protocol and government departments
The Jackson report had recommended that
The Boxall approach made eminently good sense at the time that case was decided. However, now that there is an extremely sensible protocol in place for judicial review claims, I consider the Boxall approach needs modification, . . . in any judicial review case where the claimant has complied with the protocol, if the defendant settles the claim after (rather than before) issue by conceding any material part of the relief sought, then the normal order should be that the defendant pays the claimant's costs. A rule along these lines would not prevent the court from making a different order in those cases where particular circumstances warranted a different costs order.
The Respondent contended both that there was no need to amend the Boxall principles, and made the further case that, especially in the case of the UK Border Agency, that it was not practicable to respond properly to letters before action. These issues were considered in detail throughout the hearing and judgement with the Court concluding:
59. 'What is not acceptable is a state of mind in which the issues are not addressed by a defendant once an adequately formulated letter of claim is received by the defendant. In the absence of an adequate response, a claimant is entitled to proceed to institute proceedings. If the claimant then obtains the relief sought, or substantially similar relief, the claimant can expect to be awarded costs against the defendant. Inherent in that approach, is the need for a defendant to follow the Practice Direction (Pre-Action Conduct) or any relevant Pre-Action Protocol, an aspect of the conduct of the parties specifically identified in CPR r.44.3(5). The procedure is not inflexible; an extension of time may be sought, if supported by reasons.
60. Notwithstanding the heavy workload of UKBA, and the constraints upon its resources, there can be no special rule for government departments in this respect. Orders for costs, legitimately made, will of course add to the financial burden on the Agency. That cannot be a reason for depriving other parties, including publicly funded parties, of costs to which they are entitled.
Whilst the Court declined to make the amendment suggested by Jackson LJ, they essentially achieved the same end through different means by intensifying the focus upon the conduct of the parties.
(c) 'Pragmatic reasons', the conduct of the parties and the duty of the Court to investigate
The Court repeatedly stressed throughout the judgement that the conduct of the parties, including the adherence of each party to the Pre-action protocol and behaviour post relief were very relevant to costs decisions. Of even greater importance the Court dealt firmly with one of the key issues: the need to look behind the suggestion that the Defendant granted the Claimant relief for 'pragmatic reasons'.
The Court stated at paragraph 63 that it has:
'... serious misgivings about [the Respondent's] claim to avoid costs when a claim is settled for "purely pragmatic reasons" ... The expression "purely pragmatic" covers a multitude of possibilities. A clear explanation is required, and can expect to be analysed, so that the expression is not used as a device for avoiding an order for costs that ought to be made.'
and went on to hold that
67. 'The circumstances of each case do require analysis if injustice is to be avoided. Such analysis will not normally be difficult if the parties have stated their cases competently and clearly and if the statement of reasons required when a consent order granting relief is submitted to the court genuinely and accurately reflects the reason for the termination of proceedings.
68. 'I accept that the principle of proportionality, and the workload of the courts, require that limits are placed on the degree of analysis which is appropriate but judges should not too readily be deterred. If they find obscurity, or obfuscatory conduct by the parties, that can be reflected in the order made. A willingness to investigate is likely to promote clarity in future cases.'
Special considerations relating to legally aided litigation
There was also deep concern that failure to award costs in meritorious cases was hindering access to justice. It was evident from some of the decisions that there was a reluctance to engage in detail with costs issues where to do so would inevitably increase costs that would either way end up being met by the public purse.
Whilst the Court agreed that the fact that a litigant is legally aided is no basis for awarding costs either way, they did agree that the Courts needed to be alive to the pressures on legally aided practitioners and referred to the comments by Lord Hope in Re appeals by Governing Body of JFS [2009] 1 WLR 2353:
'It is one thing for solicitors who do a substantial amount of publicly funded work, and who have to fund the substantial overheads that sustaining a legal practice involves, to take the risk of being paid at lower rates if a publicly funded case turns out to be unsuccessful. It is quite another for them to be unable to recover remuneration at inter partes rates in the event that their case is successful. If that were to become the practice, their businesses would very soon become financially unsustainable.
The circumstances in which that comment was made were somewhat different, but the Court of Appeal went on to hold that:
'Lord Hope's statement that "the consequences for solicitors who do publicly funded work are a factor which must be taken into account" is intended to be of general application ... Moreover, a culture in which an order that there be no order as to costs in a case involving a public body as defendant, because a costs order would only transfer funds from one public body to another is in my judgment no longer acceptable.'
Thus whilst the Courts should continue to adopt a proportionate allocation of resources to assessing the relative merits of the claim and defence along with the conduct of the parties, the fact that a publically funded litigant is seeking his costs is a relevant factor that may warrant a detailed consideration of the issues.
Claimant lawyers will welcome the return to rigour presaged by this judgment, which will come as a particular relief to legally-aided lawyers, beset as they are by funding difficulties: at least they can now expect to receive their costs in good cases properly brought.
Duncan Lewis acknowledge the assistance of Richard Wilson QC of 36 Bedford Row and Philip Nathan of Landmark Chambers, who worked together with our solicitor-advocate Adam Tear as counsel for this appeal.
We are also grateful for the helpful interventions by the Public Law Project and the General Council of the Bar.
Footnotes
1. Bahta & Others v SSHD [2011] EWCA Civ 895, previously known as 'AK', para 2
2. R (Boxall) v Waltham Forest LBC 21 December 2000 (2001) 4 CCL Rep 258
3. ZO and Others v Secretary of State for the Home Department [2009] EWCA Civ 442; [2009] 1 W.L.R. 2477
4. See our previous article 'Permission to Work – an update'
5. ZO (Somalia) & Ors, R (on the application of) v Secretary of State for the Home Department [2010] UKSC 36, para 51
6. Following a further mass application for interim relief by Duncan Lewis.
7. R (RS (Sri Lanka)) v Secretary of State [2011] EWCA Civ 114
8. Mendes v London Borough of Southwark [2009] EWCA Civ 594
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