R (Allseas Group SA) v Paul Sultana
| Jurisdiction | England & Wales |
| Judge | Leonard |
| Judgment Date | 31 October 2023 |
| Neutral Citation | [2023] EWHC 2731 (SCCO) |
| Court | Senior Courts |
| Docket Number | Case No: T20157243 |
[2023] EWHC 2731 (SCCO)
COSTS JUDGE Leonard
Case No: T20157243
SCCO Reference: SC-2022-CRI-000070
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
Thomas More Building
Royal Courts of Justice
London, WC2A 2LL
Appellant: Allseas Group SA
The appeal has been successful (in part) for the reasons set out below.
COSTS JUDGE Leonard
Judgment on Appeal under Regulation 10 of the Costs in Criminal Cases (General) Regulations 1986
This appeal concerns the determination or assessment (the words being interchangeable for present purposes) of the costs payable to the Appellant from central funds by virtue of an order made under section 17 of the Prosecution of Offences Act 1985 (“the 1985 Act”).
The Appellant has appealed on 17 grounds, 10 of which have been resolved by agreement. This judgment addresses those grounds which have not. I should express my gratitude to Mr Bacon KC for the Appellant, and to Mr Cohen, Mr Morris and Mr Orde for the Lord Chancellor, for their very thorough submissions on the grounds of appeal that fell to be determined by me, and for their successful negotiation of those that have been resolved by agreement.
Primary Legislation and Policy
Section 17 of the 1985 Act reads, insofar as pertinent:
“ 17.—Prosecution costs.
(1) Subject to subsections (2) and (2A) below, the court may… in any proceedings in respect of an indictable offence… order the payment out of central funds of such amount as the court considers reasonably sufficient to compensate the prosecutor for any expenses properly incurred by him in the proceedings…
(2A) Where the court considers that there are circumstances that make it inappropriate for the prosecution to recover the full amount mentioned in subsection (1), an order under this section must be for the payment out of central funds of such lesser amount as the court considers just and reasonable.
(2B) When making an order under this section, the court must fix the amount to be paid out of central funds in the order if it considers it appropriate to do so and—
(a) the prosecutor agrees the amount, or
(b) subsection (2A) applies.
(2C) Where the court does not fix the amount to be paid out of central funds in the order—
(a) it must describe in the order any reduction required under subsection (2A), and
(b) the amount must be fixed by means of a determination made by or on behalf of the court in accordance with procedures specified in regulations made by the Lord Chancellor.”
Section 16 of the 1985 Act provides for the payment of defence costs out of central funds. Like section 17, it provides (at section 16(6)) for payment to be limited to such amount as the court considers reasonably sufficient to compensate the defendant for any expenses properly incurred by him in the proceedings, and (at section 16(6A), and before 1 October 2012 at section 16(7)) for the court, in appropriate circumstances, to order payment of such lesser amount as the court considers just and reasonable.
Section 20 of the 1985 Act empowers the Lord Chancellor to limit the costs recoverable under section 16 orders. Before section 20 was amended with effect from 1 October 2012, that power also extended to section 17.
In R (Law Society) v Lord Chancellor [2010] EWHC 1406 (Admin) Elias LJ and Keith J heard a challenge to regulations introduced by the Lord Chancellor in 2009 under section 20, restricting the amounts recoverable under section 16 orders to Legal Aid rates. The court found the regulations to be unlawful by reference to the provisions of section 16 for compensation to be “reasonably sufficient”.
At paragraphs 48 and 52 of his judgment Elias LJ said:
“…The s 20 power has to be exercised “to carry into effect” the principles enunciated in Part II of the Act, and that includes the principles set out in s 16(6)… That provision requires that the compensation must be “reasonably sufficient”. It should be such amount as is reasonably incurred for work properly undertaken. In my view, one can only sensibly ask whether the cost has been reasonably incurred by having regard to the prevailing market. The individual defendant seeking legal representation is a consumer in that market. The amount he or she will have to pay to secure the services of a lawyer will be determined by that market…
… The obligation is to provide a sum of money which is reasonably sufficient to compensate the successful defendant. The word “sufficient” pre-supposes that there is some measure to determine whether the amount paid satisfies that criterion of sufficiency or not. It must be sufficient by reference to some particular criterion or criteria. In this case the relevant measure is the principle of compensation, albeit one which is constrained by considerations of what is reasonable and proper expenditure…”
The amendments made to section 20 with effect from 1 October 2012 included provision to the effect that the Lord Chancellor may restrict by regulations the amount recoverable under section 16, whether or not that results in the fixing of an amount that the court considers reasonably sufficient or necessary to compensate the defendant.
No such provision has been made in respect of orders made under section 17. That appears to embody a policy referred to by Elias LJ at paragraph 65 of his judgment in R (Law Society) v Lord Chancellor:
“… Ms Albon in her witness statement has identified a number of reasons why the Secretary of State has chosen not to cap private prosecutors' costs in the same way as defendants' costs. The Lord Chancellor took the view that it might deter private prosecutions if the claimants were to be so limited and that would be against the public interest. Some private prosecutors conduct prosecutions on a fairly regular basis. This will include a number of charities, such as the RSPCA. They will need to recover expenditure close to actual levels, otherwise they would be out of pocket, and that in turn would deter them from bringing such prosecutions.…”
Lane J put those observations into a wider context at paragraph 79 of his judgment in Fuseon Ltd v Senior Courts Costs Office [2020] EWHC 126 (Admin):
“… the compensatory nature of section 17 needs to be recognised in the context of the importance afforded to private prosecutions. That importance explains why, despite the similarities between sections 16 and 17 of the 1985 Act, the Lord Chancellor was held in R (Law Society of England and Wales) to be entitled to decide not to cap private prosecutors' costs in the same way as defendants' costs. Paragraph 65 of Elias LJ's judgment, although describing private prosecutors (such as the RSPCA) who act in that capacity on a fairly regular basis, falls to be read as having a more general application; particularly where he highlighted the fact that, unless private prosecutors can “recover expenditure close to actual levels… they would be out of pocket, and that in turn would deter them from bringing such prosecutions…”
Secondary Legislation and Guidance
The determination under section 17(2C)(b) above of the amount of costs payable from central funds is governed by Part III of the Costs in Criminal Cases (General) Regulations 1986 (“the 1986 Regulations”).
Regulation 5 sets out the mechanism for the assessment of the costs awarded:
“(1) Costs shall be determined by the appropriate authority in accordance with these Regulations.
(2) Subject to paragraph (3), the appropriate authority shall be…an officer appointed by the Lord Chancellor in the case of proceedings in the Crown Court…
(3) The appropriate authority may appoint or authorise the appointment of determining officers to act on its behalf under these Regulations in accordance with directions given by it or on its behalf.”
The officers referred to at regulation 5(3) are the Legal Aid Agency (“LAA”)'s Determining Officers.
Criteria for the assessment of costs awarded out of central funds are set out at Regulation 7, which insofar as pertinent reads:
“(1) The appropriate authority shall consider the claim and any further particulars, information or documents submitted by the applicant… and shall allow costs in respect of—
(a) such work as appears to it to have been actually and reasonably done; and
(b) such disbursements as appear to it to have been actually and reasonably incurred.
(2) In calculating costs under paragraph (1) the appropriate authority shall take into account all the relevant circumstances of the case including the nature, importance, complexity and difficulty of the work and the time involved.
(3) Any doubts which the appropriate authority may have as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved against the applicant.
(4) The costs awarded shall not exceed the costs actually incurred.
(5) … the appropriate authority shall allow such legal costs as it considers reasonably sufficient to compensate the applicant for any expenses properly incurred by him in the proceedings…”
Rule 45.2(7) of the Criminal Procedure Rules provides:
“On an assessment of the amount of costs, relevant factors include—
(a) the conduct of all the parties;
(b) the particular complexity of the matter or the difficulty or novelty of the questions raised;
(c) the skill, effort, specialised knowledge and responsibility involved;
(d) the time spent on the case;
(e) the place where and the circumstances in which work or any part of it was done; and
(f) any direction or observations by the court that made the costs order.…”
Factors to be taken into account on assessment are also listed at paragraphs 1.11 and 1.12 of the 1995 Taxing Officers' Notes for Guidance (“TONG”):
“(a) the importance of the case, including consequences to reputation and Livelihood
(b) the complexity of the matter
(c) the skill, labour, specialised...
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