Lord Chancellor v Rees QC & Others
| Jurisdiction | England & Wales |
| Judge | SIR CHARLES GRAY,Sir Charles Gray |
| Judgment Date | 19 December 2008 |
| Neutral Citation | [2008] EWHC 3168 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: T2002/7230; T2003/7049; T2003/7164; T2003/7169; T2003/7170 |
| Date | 19 December 2008 |
[2008] EWHC 3168 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Sir Charles Gray
Sitting as a Judge of the High Court
Case No: T2002/7230; T2003/7049; T2003/7164; T2003/7169; T2003/7170
Mr Clive Lewis QC & Mr Vikram Sachdeva (instructed by Treasury Solicitors) for the Appellant
Ms Clare Montgomery QC & Mr Andrew Post (instructed by Irwin Mitchell) for the Respondents Mr John Rees QC in person
Hearing dates: 12–13 November 2008
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Sir Charles Gray:
Introduction
This is an appeal by the Lord Chancellor against decisions of Costs Judge Rogers dated 28 January 2008 in relation to the basic fees allowed to fifteen counsel (who are the Respondents to the appeal). The Respondents acted for defendants in criminal proceedings arising out of a large Missing Trader Intra Community VAT fraud.
The Respondents were all instructed under public funding pursuant to the Criminal Defence Service (Funding) Order 2001 (2001 SI No. 855) (“the 2001 Order”). The basic fees payable to the Respondents were subject to ex post facto assessment, that is, the basic fees fell to be assessed retrospectively.
In the view of the Lord Chancellor these appeals raise questions of very significant public importance in relation to the manner in which Determining Officers should assess criminal lawyers' fees on an ex post facto assessment and in particular whether and, if so, to what extent it is appropriate for reference to be made to the general market in criminal lawyers' fees as a cross-check that the fee proposed is not out of kilter with market forces.
I was told that, although ex post facto assessment of basic fees was phased out pursuant to the Criminal Defence Service (Funding) Order 2007 as of 30 April 2007, there remains potentially up to £100,000,000 worth of ex post facto claims on behalf of counsel which remain to be determined.
Is permission to appeal required?
I should deal first with a preliminary point which arises, namely whether the Lord Chancellor requires permission to appeal in this case. I can deal with it briefly because neither Miss Clare Montgomery QC, who appears on behalf of the Respondents with Mr Andrew Post, nor the first Respondent, Mr John Rees QC, who has made submissions on his own behalf, has sought to contest the Lord Chancellor's right to appeal.
Ordinarily permission to appeal from a decision of a Costs Judge under the 2001 Order would be required because such an appeal falls under the regime of Part 52 of the Civil Procedure Rules 1998. However, as I read paragraph 22(5) of the CDS Order 2001, the Lord Chancellor may appeal to the High Court against the decision of the Costs Judge without permission. I am fortified in that view by the fact that the Senior Costs Judge, Master Hurst, arrived at the same conclusion in Frieze v Lord Chancellor, 15 March 2007, unreported.
That said, it appears to me to be incumbent on the Lord Chancellor in any appeal to the High Court to identify some question of law or of principle which arises, since the High Court would be slow to differ from the assessment of a costs judge on an issue of fact or judgment: see Sharratt v London Central Bus Company [2004] EWCA Civ 575, per Buxton LJ at [46].
I also bear in mind that an appellate court should only interfere when they consider that the judge of first instance has not merely preferred an imperfect solution but has exceeded the generous ambit within which a reasonable disagreement is possible: Tanfern v Cameron-Macdonald [2000] 1 WLR 1311, per Brooke LJ at 1317D-F. See also the observations of Buckley J in Mealing McLeod v Common Professional Examination Board [2000] 2 Costs L.R. 223.
The criminal trials
I can deal quite shortly with the criminal trials in which the Respondent counsel were instructed. The VAT fraud was split into two trials by order of Leveson J. There was a series of preparatory hearings which commenced on 28 July 2003. The first trial was due to start on 3 May 2004 but that and two succeeding fixtures were broken. The first trial eventually started on 4 April 2005 but the jury in that trial was discharged on 5 April 2005. A second jury was sworn in but that jury was also discharged on 5 May 2005. The trial re-commenced on 9 May 2005 and ran until 28 August 2005 when the jury was again discharged because of allegations of jury tampering. The trial re-commenced on 26 September 2005 and ran until 12 June 2006. There were three sentencing hearings. The second trial was originally fixed to commence on 10 September 2004 but that date and three later dates were broken. The second trial eventually started on 4 September 2006 and the jury returned its verdict on 4 April 2007.
The sequence of events in both trials is of importance because it demonstrates that the proceedings were frequently disrupted and unusually lengthy. It is also important to note that the case was complex and document heavy. The Crown relied on documents running to 50,000 pages. A further 89,000 pages were provided to the Defence as voluntary disclosure. There was a three-day abuse of process hearing.
It is also to be noted that in the first trial there were five effective defendants, of whom one was acquitted and the other four convicted. They received sentences ranging from ten years six months to six years. In the second trial there were eight effective defendants who received sentences ranging from eight years to four years six months. I mention these sentences because they give some indication of the seriousness of the fraud in which the convicted defendants had been engaged.
The procedural history
The Determining Officer in the case of each Respondent was Mr A.E. Hoyles of the National Taxing Team. His written reasons included a brief case summary of the VAT fraud and the resulting loss of tax to the Inland Revenue which was estimated to be in the region of £20,000,000. He noted that the fraud lasted between the beginning of September and the end of November 2000. He described the roles played by the various defendants in the fraud. He summarised the central theme of the defence case as being that the prosecution had misunderstood the nature and extent of the fraud which, according to the defendants, was likely to have been controlled by other individuals and companies who were not before the court.
The Determining Officer gave an account of the numerous pre-trial hearings and the numerous fixtures which were broken. He referred to the fact that, as the case expanded, it was referred to the Very High Cost Cases (“VHCC”) Unit but that the Unit declined to contract the case because, as we understand it, the Unit was still in the process of being set up.
Thereafter the Determining Officer gave reasons for his conclusion that the basic fees claimed by each of the Respondents should be reduced to figures allowing reasonable amounts for all the work actually and reasonably done by them. In arriving at his conclusion the Determining Officer took some account of both the fees paid to prosecuting counsel and the rates which would have been payable to the Respondents if the case had been accepted by the Legal Services Commission under the VHCC Scheme (which it was not). The Determining Officer did not include in his reasons any reference to the Graduated Fee Scheme (“GFS”) as being a comparator.
The overall conclusion of the Determining Officer in the cases of all of the Respondents was that the basic fees claimed by them were “wholly unsupportable”.
The judgment of the Costs Judge
In paragraph 30 of his judgment the Costs Judge identified the four issues of principle as being:
a) the relevance of the Appellate Committee of the House of Lords Report on the Clerk of the Parliament's Reference regarding criminal legal aid taxation [2000] 1 Costs L.R. 7 (“The House of Lords Report”);
b) the guidance which a Determining Officer may gain from a comparison with prosecution fees;
c) the extent to which a Determining Officer may take account of payments that might have been made under the VHCC Scheme or GFS and
d) the issue of “lost work”.
I shall have to return in due course to the judgment which is the subject of the present appeal. For present purposes it will suffice if I summarise the way in which the Costs Judge dealt with those four issues as follows:
a) He held that the House of Lords Report related solely to the proper quantification of brief fees for appeals to the House of Lords in criminal cases and doubted whether the House was purporting to lay down any general principles. He rejected the submission that the House of Lords Report should be used as a cross check and concluded that such a comparison was not of any value. He did not believe that the House was directing its mind to the sort of case with which the appeals before him were concerned.
b) As regards the submission on behalf of the Lord Chancellor that the fees payable to the Respondents should be compared with the fees paid to the Prosecution as another cross check, the Costs Judge pointed out that prosecuting counsel's fees are almost invariably agreed on the basis of an hourly rate multiplied by whatever number of hours is considered to be reasonable. He concluded that, whilst he could not say that no comparison can ever be made between prosecution and defence counsel's fees, a true comparison might well only be possible in a “one on one situation”.
c) In regard to the submission that the Respondents' basic fees should be compared...
To continue reading
Request your trial
-
The Financial Conduct Authority v MacRis
... ... Lord Justice Longmore ... Lord Justice Patten ... by reference to external material, whether it would be possible for others to put a name to the person whom the Authority has singled out and ... ...
-
Eric Evans and Others v The Serious Fraud Office
...comparators: because privately funded work is essentially market driven, whilst publicly funded work is closely regulated ( The Lord Chancellor v John Charles Rees QC [2008] EWHC 3168 (QB)). Similarly, it is not appropriate to use publicly funded comparators when assessing privately funded ......
-
Lord Chancellor v Ian Henery Solicitors Ltd
...Lord Chancellor will only pursue an appeal in a proper case. As Sir Charles Gray observed, sitting a Judge of the High Court in Lord Chancellor v Rees and others [2008] EWHC 316 (QB), at paragraph 7: "…it appears to me that it is incumbent on the Lord Chancellor in any appeal to the High Co......
-
Deutsche Bank AG v Sebastian Holdings Inc.
...to have regard to the sums paid by the Defendant, quoting the decisions in Lord High Chancellor v Wright [1993] 1 WLR 1561 and Lord Chancellor v Rees [2008] EWHC 3168 (QB). To those could be added the comments of Lawrence Collins J. (as he then was) in Orwin v British Coal Corporation [2......