R (Fuseon Ltd) v Shinners
| Jurisdiction | England & Wales |
| Judge | Master Gordon-Saker |
| Judgment Date | 09 April 2020 |
| Neutral Citation | [2020] EWHC B18 (Costs) |
| Date | 09 April 2020 |
| Docket Number | Case No: 83/18 |
| Court | Senior Courts |
[2020] EWHC B18 (Costs)
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
Royal Courts of Justice
Strand, London, WC2A 2LL
Master Gordon-Saker
SENIOR COSTS JUDGE
Case No: 83/18
This judgment does not follow a hearing
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.
Master Gordon-Saker Master Gordon-Saker The procedural background
Fuseon Limited (“Fuseon”) is entitled to a payment out of central funds under section 17 of the Prosecution of Offences Act 1985 in respect of its costs of the prosecution of Timothy Shinners in the Crown Court at Preston. In September 2017 Fuseon submitted a claim for costs of £427,909 to the Criminal Cases Unit of the Legal Aid Agency. That claim was determined in November 2017 by Mr FitzGerald-Morris, a case manager, in the sum of £180,000. Fuseon requested a redetermination and, in February 2018, Mr FitzGerald-Morris increased the sum allowed to £240,000. He provided written reasons in respect of the redetermination in April 2018.
Still dissatisfied, Fuseon appealed to a costs judge pursuant to regulation 10 of the Costs in Criminal Cases (General) Regulations 1986. The appeal was heard by Master Rowley in September 2018. He dismissed the appeal by his written decision dated 30 th April 2019 and, on 7 th June 2019, he declined to certify a point of principle of general importance for the purposes of regulation 11 of the 1986 regulations.
In August 2019 Fuseon commenced judicial review proceedings in respect of Master Rowley's decision, invoking the inherent jurisdiction of the High Court to cure a real injustice. Those proceedings were opposed by the Lord Chancellor.
In Fuseon Limited v Senior Courts Costs Office [2020] EWHC 126 (Admin) Lane J. quashed both the decision of Master Rowley not to certify a point of principle of general importance and his decision to dismiss the appeal from the redetermination. By paragraph 2 of his order dated 28 th January 2020 Lane J. directed that:
“The assessment of the Claimant's costs from central funds … be remitted to the Senior Costs Master for further directions …”.
The decision of Master Rowley on appeal having been quashed, it seems to me that the task I am given is to rehear the appeal from the redetermination by Mr FitzGerald-Morris.
On 13 th February 2020 Fuseon's solicitors wrote to me requesting that I decide the appeal on the papers and without a hearing. Given the extent to which the issues have been ventilated before both Master Rowley and the Administrative Court I indicated that I was minded to do that, but would first invite written representations from the Legal Aid Agency.
On 16 th March 2020 Mr Michael Rimer, a Senior Lawyer at the Legal Aid Agency, sent a short email to my clerk:
Thank you for your email dated 25 February 2020 which notified us that Master Gordon-Saker is going to decide the appeal on the papers and invited any written representations in relation to the appeal or the costs of the appeal to be served and filed by 18 March.
The LAA does not have any representations on the specific question of whether it was reasonable for Mr Laycock to have instructed EMM. Paras 82 and 84 of Mr Justice Lane's [judgment] consider this point in some detail. The LAA simply submits that if this question is answered in the affirmative, the Court should go on to consider the Singh Reduction as set out in paras 41–43 of the Judgment in order to assess whether globally the costs claimed are reasonable.
Fuseon's solicitors made written submissions in response by their letter dated 18 th March 2020.
The background to the section 17 order
Fuseon carries on the business of letting agents based in Horwich, a small town in Lancashire between Bolton and Chorley. Mr Laycock is its director. In 2015 he discovered that Shinners, then a co-director, had committed fraud and theft to a value of over £100,000. The fraud consisted of failing to register tenancy deposits, charging over £50,000 of personal expenses as business expenses and creating false invoices.
Mr Laycock informed Greater Manchester Police but they declined to investigate, citing the effects of “austerity”. So he decided to pursue a private prosecution and, having failed to find a local firm to undertake it, in January 2016 he instructed Edmonds Marshall McMahon Limited (“EMM”), who specialise in private prosecutions but are based in Central London. On 26 th August 2016 an information was laid at Preston magistrates' court. The final indictment contained 6 counts: 2 of false representation, 2 of making articles for use in fraud and one each of theft and fraudulent trading. The trial of 5 counts took place over 11 days in May and June 2017 before HH Judge Knowles QC and a jury. Shinners was convicted of 4 counts and was sentenced to 3 years' imprisonment. On 7 th July 2017 an order was made “that a payment be made to the prosecution out of central funds in respect of prosecution costs, including the costs of the investigation, and that the sum to be paid shall be determined” by the National Taxing Team. In making that order the Crown Court had been specifically told that Fuseon's costs were £427,909.
The statutory framework
Section 17 of the 1985 Act provides:
(1) Subject to [subsections (2) and (2A)] below, the court may —
(a) 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.
Regulation 7 of the Costs in Criminal Cases (General) Regulations 1986 provides:
(1) The appropriate authority shall consider the claim, any further particulars, information or documents submitted by the applicant under regulation 6(5), and shall allow such 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 or 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) Subject to paragraph (6), 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.
The determination and redetermination
Mr FitzGerald-Morris took the view that “this was not an exceptionally complex Crown Court case” and that the total loss to Fuseon as the result of Shinners' activities was approximately £62,000 (excluding any liability in respect of the tenants' deposits). He considered the costs claimed “disproportionate to the fairly ordinary nature of the case”. He allowed the solicitors' time at the rates “of a local firm acting”. He first assessed the bill on an item by item basis and allowed counsel's fees of £21,644, other disbursements (principally accountants' fees) of £45,291 and profit costs of £215,658. He had then stood back and, applying the Singh principle, reduced that to £180,000. All of these figures are inclusive of value added tax.
On redetermination Mr FitzGerald-Morris remained of the view that the costs claimed were disproportionate and that this was “a fairly ordinary Crown Court case” rather than a complex fraud case. He was also of the view that “there should not be a significant disparity between the cost of a private and public prosecution” but accepted that a private prosecutor “does not have access to work done at the same kind of rates as the Public Prosecutor”. He maintained his view that the guideline hourly rates for Preston should be allowed, rather than the London rates claimed. However, allowing for the higher rates that private prosecutors will incur, he decreased the Singh reduction and increased the amount allowed to £240,000.
Mr FitzGerald-Morris' subsequent written reasons are probably the most detailed that I have seen. He did not accept that Fuseon had no choice but to instruct a central London firm and considered that it could have instructed a firm in the North West. The instruction of EMM was a “luxury choice” and therefore unreasonable. Applying the guideline hourly rates for summary assessment, he had allowed the equivalent of national band one rates. So, as against £350 claimed for grade A fee earners, he had allowed £217. He had consequently reduced the travelling time and expenses claimed to that which...
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