R (Corner House Research) v Secretary of State for Trade and Industry
| Jurisdiction | England & Wales |
| Judge | Lord Phillips of Worth Matravers |
| Judgment Date | 01 March 2005 |
| Neutral Citation | [2005] EWCA Civ 192 |
| Docket Number | Case No: C1/2004/2696 |
| Court | Court of Appeal (Civil Division) |
| Date | 01 March 2005 |
[2005] EWCA Civ 192
Lord Phillips of Worth Matravers
(Master of the Rolls)
Lord Justice Brooke
(Vice-President of the Court of Appeal, Civil Division) and
Lord Justice Tuckey
Case No: C1/2004/2696
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE ADMINISTRATIVE COURT
Mr Justice Davis
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Lester of Herne Hill QC and Ben Jaffey (instructed by Leigh Day & Co) for the Appellants
Monica Carss-Frisk QC and Brian Kennelly (instructed by the Treasury Solicitor) for the Respondents
Richard Drabble QC (oral submissions), Michael Fordham (written submissions) (instructed by the Public Law Project) for the Public Law Project as Interveners
Lord Phillips of Worth Matravers MR: This is the judgment of the court, prepared by Brooke LJ.
Introduction
On 22nd December 2004 we heard an application by the claimants for permission to appeal against an order made by Davis J two days earlier whereby he refused to grant them a protective costs order ("PCO") for the substantive two-day hearing of this judicial review application which was fixed to take place on 13th -14th January 2005. These proceedings were commenced on 29th November 2004, and on 2nd and 3rd December Beatson J granted the claimants an initial PCO and directed that their application for such an order to cover the main hearing should be listed as soon as possible. He also directed a "rolled-up hearing" of the substantive application so that if the judge at that hearing granted the claimants permission to apply for judicial review he would immediately proceed to hear that application on its merits.
Although Davis J refused the claimants permission to appeal to this court, he extended their interim PCO to cover their equivalent application in this court. The matter was listed before us as an application for permission to appeal with the appeal to follow if permission was granted. At the end of the hearing, which lasted a full day, we said that we would grant permission to appeal and that we would allow the appeal. We directed that a PCO should be made which must include a cost-capping element, along the lines of that directed by this court in King v Telegraph Group Ltd [2004] EWCA Civ 613 (see in particular paras 101–2). The senior costs judge then arranged a hearing during the vacation at which he could fix the amount of the cap, but in the event the defendant's solicitors elected to consent to an order made in the maximum amount claimed by the claimants on the basis that they would be at liberty to challenge the reasonableness of the amount claimed in due course, if the need arose. On 13 th January 2005 a consent order was made disposing of the claimants' application for judicial review, so that the merits of their case never received a judicial determination..
In this judgment we give the reasons why we decided to allow the appeal against Davis J's order.
The nature of the hearing
We will start by explaining the status of the Public Law Project in this litigation. Because this was the first occasion on which issues relating to PCOs had been considered in depth by this court (since an appeal to this court was likely whatever decision the judge had made), the judge permitted the Public Law Project to intervene by placing before him a substantive generic submission settled by junior counsel (Mr Michael Fordham) which set out reasons, supported by authority, why the courts should now be willing to adopt a more relaxed approach than hitherto when invited to make PCOs in public law cases which raise issues of general public importance. On the hearing of the appeal we permitted Mr Drabble QC to make brief submissions to us by way of oral exposition of these contentions.
Both the hearing before the judge and the hearing in this court had to be arranged at short notice and under great pressures of time. For this reason, although over 40 authorities were placed before us, we had no opportunity for pre-reading, and it was only after we announced our decision that we had a proper opportunity to study the case-law in depth, and to follow up some of the leads to other cases that are suggested in the case-law.
The traditional approach to costs in private law litigation
It will be convenient to structure this judgment by considering the relevant law first, and then to explain why we considered that it was appropriate to grant a PCO on the facts of this particular case. The general purpose of a PCO is to allow a claimant of limited means access to the court in order to advance his case without the fear of an order for substantial costs being made against him, a fear which would disinhibit him from continuing with the case at all. In this jurisdiction the leading authority on this topic is currently the judgment of Dyson J in R v Lord Chancellor ex p CPAG [1999] 1 WLR 347 (for which see para 44 below).
As a general rule it has been traditionally accepted in the courts of England and Wales that costs follow the event. In British Columbia (Minister of Forests) v Okanagan Indian Band (2003) 114 CCR 2d 108 LeBel J said at para 19:
"The jurisdiction to order costs of a proceeding is a venerable one. The English common law courts did not have inherent jurisdiction over costs, but beginning in the late 13 th century they were given the power by statute to order costs in favour of a successful party. Courts of equity had an entirely discretionary jurisdiction to order costs according to the dictates of conscience."
In McDonald v Horn [1995] ICR 685 Hoffmann LJ took up the story at p 693.
"The court's jurisdiction to deal with litigation costs is based upon section 51 of the Supreme Court Act 1981, which, with some rearrangement of the words, is derived from section 5 of the Supreme Court of Judicature Act 1890:
'(1) Subject to the provisions of this or any other enactment and to rules of court, the costs of and incidental to all proceedings in … the High Court … shall be in the discretion of the court…. (3) The court shall have full power to determine by whom and to what extent the costs are to be paid. (4) In subsections (1) and (2) 'proceedings' includes the administration of estates and trusts.'
The background to the Act of 1890 is briefly as follows. In the old courts of common law, costs followed the event. The judge had no discretion. In the Court of Chancery, costs were in the discretion of the court but that discretion was exercised according to certain principles which I shall discuss later. The first Rules of the new Supreme Court of Judicature (enacted in 1875) adopted the Chancery practice. But in In re Mills' Estate (1886) 34 Ch D 24 the Court of Appeal decided that the Rules conferred a discretion only in cases in which before the Judicature Acts the courts would have had jurisdiction to make awards of costs. The Act of 1890 was intended to confer such jurisdiction in any case whatever.
In Aiden Shipping Co. Ltd. v. Interbulk Ltd [1986] AC 965 the House of Lords drew attention to the broad language of section 51 of the Supreme Court Act 1981. The policy, said Lord Goff of Chieveley, at p. 975, was to confer jurisdiction in wide terms:
'thus ensuring that the court has, so far as possible, freedom of action, leaving it to the rule-making authority to control the exercise of discretion (if it thinks it right to do so) by the making of rules of court, and to the appellate courts to establish principles upon which the discretionary power may, within the framework of the statute and the applicable rules of court, be exercised.'
The discretion conferred by section 51 is thus by no means untrammelled. It must be exercised in accordance with the rules of court and established principles."
In Aiden the House of Lords found it possible to interpret these wide statutory powers so as to confer a jurisdiction on a court, if it thought it just, to order the payment of costs by someone who was not even a party to the litigation. It considered that there was no justification for implying a limitation on the court's powers to the effect that costs could only be ordered to be paid by the parties themselves (see Lord Goff at pp 979–980).
In Davies v Eli Lilley & Co [1987] 1 WLR 1136 this court upheld an order made by Hirst J in the Opren litigation to the effect that the 1500 plaintiffs should contribute rateably to the costs incurred by the legally aided lead plaintiff in a test action. Lloyd LJ said at p 1144 that Order 62 Rule 3(3) was concerned with the manner in which, and not the time at which, the court's discretion as to costs should be exercised, and that there was nothing in the language of the rule to prohibit the exercise of the discretion at an earlier stage than the conclusion of the proceedings where the interests of justice so required. Sir John Donaldson MR congratulated the judge (at p 1143) on providing a very fair and workable order in a novel and highly complex situation.
In Steele Ford & Newton v CPS [1994] 1 AC 22 the House of Lords held that section 51 did not confer a power on a court to order the payment of a successful party's costs out of central funds in the absence of any express statutory power enabling such an order to be made. After referring to a number of situations in which a court was unable to achieve justice for a successful litigant, Lord Bridge said (at pp 40–41)
"I will not multiply examples, but I hope I have said enough to explain why I cannot attribute to the...
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