Holden & Company v Crown Prosecution Service (No. 2)

This is the judgment of the court, prepared by Lord Justice Lloyd.

In November 1989 we heard five appeals, all of which raised the same point, namely, the nature and extent of the court's power in a criminal trial to order a solicitor to pay the whole or part of the prosecution costs.

The decision of the court is well summarised in Supreme Court Practice 1991 at page 1036.

We do not intend to refer to the decision further, since the position has now been transformed by section 111 of the Courts and Legal Services Act 1990. That section has amended the Prosecution of Offences Act 1985 by introducing a new statutory power to make an order against a legal or other representative where costs have been wasted: see section 19A. There is a similar amendment to section 51 of the Supreme Court Act 1981 to cover civil proceedings, introduced by section 4 of the 1990 Act.

These amendments have necessitated a new Order 62 rule 11, which came into force on 1st October this year, and a new Practice Direction issued on 3rd May this year, to replace the 1959 Practice Direction. The 1991 Practice Direction is reported at (1991) 1 W.L.R. 498.

The inherent power with which we are concerned has survived these changes: see Part IX of the Practice Direction. But it is only to be used in exceptional circumstances, not covered by the statutory power.

Of the five appeals, one was dismissed and four allowed. The question then arose as to the successful appellants' costs. The court asked whether there was any reason why the costs should not come out of central funds. Miss Beale, for the Crown Prosecution Service, said she did not think we had jurisdiction to award costs out of central funds, since these appeals were civil appeals, not criminal appeals.

When we repeated the same question a little later, asking whether it was clear that we had no jurisdiction, Mr. Speller, for the appellants, replied that it was absolutely clear. There was no doubt about it.

In face of that united front, we adjourned the application for costs, sine die, in the hope that the problem could be resolved at an administrative level, since it was obviously just that the successful solicitors should get their costs from somewhere. That has not proved possible. So the case comes back to us.

Mr. Speller now submits that there is, and always has been, a power to order these costs out of central funds, not under the Prosecution of Offences Act, but under section 51 of the Supreme Court Act 1981. That section, until recently amended, provided:

"Subject to the provisions of this or any other Act and to rules of court, the costs of and incidental to all proceedings in the civil division of the Court of Appeal and 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."

Until 1986 it was thought that the power to order a person to pay costs could only be exercised against a party to the proceedings. But in Aiden Shipping Co. Ltd. v. Interbulk Ltd. (1986) A.C. 965 the House of Lords held that this was not so, and that the discretion of the court is unrestricted, save only by the rules of court. Is there then a discretion in this case to order costs out of central funds?

In Ex parte Central Television plc (1991) 1 W.L.R. the Crown Court had made an order under section 4 of the Contempt of Court Act 1981. The appellants exercised their right of appeal under section 159 of the Criminal Justice Act 1988, and succeeded. Section 159(5)(c) gives the Court of Appeal power to make such order as to costs as it thinks fit. There is no mention of costs out of central funds. Nevertheless, the court awarded costs out of central funds. We quote the last paragraph of the judgment:

"Although there is no express provision empowering us to make an order that the costs should come out of central funds, there is no other possible source for costs and we take the view that such a power must of necessity be implied to make the provision effective. Accordingly, since the appellants have succeeded, we order that they should have their costs and those costs should come from central funds."

The Central Television case was followed by the Divisional Court in The Queen v. Bow Street Magistrates' Court, Ex parte Mirror Group Newspapers Ltd. (unreported—2nd October 1991) That was another case on section 4 of the Contempt of Court Act 1981, but instead of coming to the Court of Appeal from the Crown Court under section 159, it came from magistrates to the Divisional Court on an application for judicial review. So there was no power to award costs under section 159(5)(c).

After referring to Aiden Shipping Co. Ltd. v. Interbulk Ltd. and the Central Television case, Nolan L.J. pointed out that the language of section 51 was very similar to the language of section 159(5)(c); indeed the former was, if anything, even more apt to cover a payment out of central funds than the latter. If an order could be made in the latter case, when justice required, without any...