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Costs on settled appeals


A quick note on a useful case on costs where an appeal has been settled. Harripaul v London Borough of Lewisham [2012] EWCA Civ 266 was an appeal to the Court of Appeal from a failed S.204 appeal to the County Court on a homeless matter.

The appeal was given permission, and Rimer LJ

expressed the view that the appellant had a real prospect of showing that the reviewing officer’s decision was materially deficient and that the judge’s upholding of it reflected unjustified benevolence. I regarded the appeal as having merit and I also considered that it would give this court the opportunity to give any necessary guidance as to the limits of the application of the observations of Lord Neuberger in Holmes-Moorhouse v. Richmond upon Thames London Borough Council [2009] 1 WLR 413, at [50] and [51].

Soon after, Lewisham decided not to contest the appeal, on the stated (and very familiar) grounds that the decision was “based on the taking of an economic view of the likely costs of resisting the appeal”. The matter was compromised by a consent order that, after providing for the carrying out of a fresh review, dismissed the appeal and varied the costs order in the county court to ‘no order as to costs’. There was provision for detailed assessment of the public funding costs of the appeal to the Court of Appeal, but there was no agreement on the costs of the appeal to the COurt of Appeal. Instead the parties made written submissions.

The appellant argued, quite simply, that they had obtained the relief sought (a fresh review decision) and so was the successful party for the purposes of CPR Part 44.3.

The appellant raised the guidance in R (Boxall) v. LB of Waltham Forest (2001) 4 CCL Rep 258, accepted as relevant by the Court as the appeal was on judicial review grounds as an appeal from s s.204 appeal. That guidance, by Scott Baker J states:

(i) the court has power to make a costs order when the substantive proceedings have been resolved without a trial but the parties have not agreed about costs.
(ii) it will ordinarily be irrelevant that the Claimant is legally aided.
(iii) the overriding objective is to do justice between the parties without incurring unnecessary court time and consequently additional cost;
(iv) at each end of the spectrum there will be cases where it is obvious which side would have won had the substantive issues been fought to a conclusion. In between, the position will, in differing degrees, be less clear. How far the court will be prepared to look into the previously unresolved substantive issues will depend on the circumstances of the particular case, not least the amount of costs at stake and the conduct of the parties.
(v) in the absence of a good reason to make any other order the fall back is to make no order as to costs.
(vi) the court should take care to ensure that it does not discourage parties from settling judicial review proceedings for example by a local authority making a concession at an early stage.

The Appellant also referred to R (on the application of Scott) v London Borough of Hackney [2009] EWCA Civ 217

including Hallett LJ’s statement at [51] that a reasonable and proportionate attempt must be made to analyse the situation and determine whether an order for costs is appropriate and that a judge must not be too ready to adopt the fall back position of no order as to costs

And raised the Court of Appeal decision in R (on the application of Bahta and Others v. Secretary of State for the Home Department and Others [2011] EWCA Civ 895, in which Pill LJ said:

64. In addition to those general statements, what needs to be underlined is the starting point in the CPR that a successful claimant is entitled to his costs and the now recognised importance of complying with Pre-Action Protocols. These are intended to prevent litigation and facilitate and encourage parties to settle proceedings, including judicial review proceedings, if at all possible. That should be the stage at which the concessions contemplated in Boxall principle (vi) are normally made. It would be a distortion of the procedure for awarding costs if a defendant who has not complied with a Pre-Action Protocol can invoke Boxall principle (vi) in his favour when making a concession which should have been made at an earlier stage. If concessions are due, public authorities should not require the incentive contemplated by principle (vi) to make them.

65. When relief is granted, the defendant bears the burden of justifying a departure from the general rule that the unsuccessful party will be ordered to pay the costs of the successful party and that burden is likely to be a heavy one if the claimant has, and the defendant has not, complied with the Pre-Action Protocol. I regard that approach as consistent with the recommendation in paragraph 4.13 of the Jackson Report.

In this case there was no relevant pre-action protocol and Lewisham’s concession was only made after permission was given for a second appeal. The burden was therefore on the Respondent to show why the Appellant should not have her costs. “The costs are anyway modest, being limited to the appellant’s costs in the Court of Appeal (and specifically not including her costs wasted in initially pursuing the appeal in the High Court and in obtaining a necessary time extension for appealing to the Court of Appeal).”

Lewisham argued that no order was the right order.

Compromise of a claim for judicial review (or similar as here) “should not be regarded as an indication that the public body accepts the merits of the claim”. Lewisham relied on Simon Brown J (as he was) in R v. Liverpool City Council, ex parte Newman (1992) 5 Admin LR 669, where he stated:

On the other hand, it may be that the challenge has become academic merely through the respondent sensibly deciding to short-circuit the proceedings, to avoid their expense or inconvenience or uncertainty without in any way accepting the likelihood of their succeeding against him. He should not be deterred from such a course by the thought that he would then be liable for the applicant’s costs. Rather, in those circumstances, it would seem appropriate that the costs should lie where they fall and there should accordingly be no order

The Boxall guidelines, Lewisham argued, meant that “it is for the Appellant to establish a good reason why Lewisham should pay the Appellant’s costs, and that in the instant case such good reason could only be that: it is “obvious” that the Appellant would have won the substantive appeal”. It was not obvious in this case, and if it had been, why did the Appellant settle the County Court appeal costs on no order. In any event, as the appellant was legally aided, her solicitors would get their costs.

Rimer LJ held that Lewisham’s arguments were misdirected in three respects:

First, the thrust of Pill LJ’s quoted observations in Bahta’s case is to the effect that, in events such as have happened here, the starting point is that the appellant is entitled to her costs and the burden of showing otherwise falls on the respondent. Mr Grundy’s submissions amount to an unjustified attempt to reverse that position. Second, his suggestion that it is relevant that, because the appellant is publicly funded, her solicitors will be paid is out of line with what Pill LJ said in paragraph [61] of his judgment in Bahta’s case:

‘In the case of publicly funded parties, it is not a good reason to decline to make an order for costs against a defendant that those acting for the publicly funded claimant will obtain some remuneration even if no order for costs is made against the defendant….’

Third, whilst the court in Bahta’s case was referred to ex parte Newman, and was concerned with the impact of concessions upon costs orders, it did not cite the passage from Simon Brown J’s judgment upon which Mr Grundy relies. I do not regard Bahta’s case as providing any general endorsement of the approach suggested in that passage.

While it was not obvious that the appellant would have won the appeal, she did have a good arguable case.

The respondent is keen to suggest that the appellant must have regarded her case as less than gilt edged, else she would not have agreed to the compromise of the county court costs order that she did. There may well be something in that. Equally, I find it difficult to believe that the respondent’s wish to halt the appeal process was not in part motivated by the consideration that it could not be sure of victory; and by a recognition that, had it fought it and lost, it would be likely to face an order for the costs of both appeals. An early settlement of the appeal would, on that basis, make good practical sense.

The Court would approach the present case on the basis that the appellant had been successful on appeal and the starting point was that she was entitled to her costs. Although the respond had made the concession and this was a factor to be considered, it did not carry the day in favour of the respondent. “If the respondent has come to the view that the issue as to the soundness of the reviewing officer’s decision does not merit the incurring of legal costs in arguing about it, it could well have taken that decision before, ideally at an early stage of the county court appeal.”

There were not sufficient reasons to depart from the general rule that the appellant was entitled to her costs as the successful party.

As anyone dealing with s.204 appeals and judicial reviews as appellant/claimant knows, many are settled after issue by the Local Authority opponent offering to settle by withdrawing and re-making the decision at issue, but insisting on no order as to costs. The principles and approach set out in this case by the Court of Appeal are equally applicable to s.204 appeals and judicial reviews, based as it is on Boxall. This case, and its interpretation of Boxall and Bahta, should help in making clear that a concession by the Defendant/Respondent amounting to the equivalent of the relief sought will normally give rise to a costs order for the Claimant/appellant. In my view, the practice by councils of offering post issue/permission settlement on terms of no order as to costs should be resisted on that basis and written submissions sought instead, if a costs award can’t be agreed.

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.


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