Court of Appeal judgment marks "seismic shift" in JR costs rules

Where a defendant public body concedes a judicial review case before trial, the presumption should be that the claimant can recover their costs, the Court of Appeal has ruled.

The Public Law Project (PLP) hailed the decision as a “seismic shift….that will fundamentally affect claimant and defendant public bodies alike”.

The case of Bahta & Ors-v-Secretary of State for the Home Department & Ors [2011] EWCA Civ 895 involved appeals against decisions as to costs by High Court judges in immigration cases following consent orders.

The appellants were seeking, by judicial review, either permission to work in the United Kingdom, or indefinite leave to remain, the grant of which includes permission to work. In the course of proceedings, they were granted what they sought and their applications were withdrawn by consent. However, the various judges refused the appellants’ applications as to costs.

Lord Justice Pill, who gave the lead judgment, said the issue at stake did not just apply to immigration cases but across the judicial review public law jurisdiction.

The courts in Bahta had applied the principles set out by Scott Baker J in R (Boxall) v Waltham Forest LBC 21 December 2000 (2001) 4 CCL Rep 258. These suggested in effect that the courts should make no order for costs in such cases unless it was “plain and obvious” that the claimant would have gone on to win.

According to the PLP, which intervened in the case, this was often seen as an insurmountable hurdle for claimants.

The PLP also suggested that the practical effect of Boxall was that “public authorities often took a ‘wait and see’ approach, declining to address allegations of wrong-doing and illegality when first alerted to them and forcing claimants to issue proceedings unnecessarily, safe in the knowledge that they could then change their minds and escape without any sanction in costs.”

This position has now been reversed, with the Court of Appeal in Bahta ruling that when the defendant concedes, the presumption will be that it should pay the claimant’s costs.

Lord Justice Pill said: “What is not acceptable is a state of mind in which the issues are not addressed by a defendant once an adequately formulated letter of claim is received by the defendant. In the absence of an adequate response, a claimant is entitled to proceed to institute proceedings. If the claimant then obtains the relief sought, or substantially similar relief, the claimant can expect to be awarded costs against the defendant.”

The judge added that inherent in that approach was the need for a defendant to follow the Practice Direction (Pre-Action Conduct) or any relevant Pre-Action Protocol, an aspect of the conduct of the parties specifically identified in CPR r.44.3(5). He said the procedure was not inflexible; an extension of time may be sought, if supported by reasons.

“Notwithstanding the heavy workload of UKBA, and the constraints upon its resources, there can be no special rule for government departments in this respect,” Lord Justice Pill said. “Orders for costs, legitimately made, will of course add to the financial burden on the Agency. That cannot be a reason for depriving other parties, including publicly funded parties, of costs to which they are entitled.”

Lord Justice Pill added that in the case of publicly funded parties, it was 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.

“Moreover, a culture in which an order that there be no order as to costs in a case involving a public body as defendant, because a costs order would only transfer funds from one public body to another is in my judgment no longer acceptable,” he said.

The judge said that whether to make an order for costs depended on the merits of the particular application, and that there was a need for analysis of the particular circumstances.

He continued: “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”.

Lord Justice Pill said 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.”

The judge added: “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 the burden is likely to be a heavy one if the claimant has, and the defendant has not, complied with the Pre-Action Protocol.”

Lord Justice Pill said he regarded that approach as consistent with the recommendations of the Jackson Report.

The judge accepted that the principle of proportionality, and the workload of the courts, required that limits were placed on the degree of analysis which was appropriate “but judges should not be too readily deterred”.

He added that where relief is granted by consent, CPR r.54.18 provided a procedure whereby the court may decide the claim for judicial review without a hearing. “That procedure should be followed wherever possible.”

Mr Justice Hedley, who agreed with Lord Justice Pill, said: “It is clear to me that Boxall is a well-established guide in the area of judicial review but like all guides it must be applied both to the particular facts of the instant case and it must take into account of procedural developments like PAPs.

“Compliance with PAP, whilst not determinative in itself, must now be a highly relevant factor in the exercise of the judicial discretion as to costs.”

Philip Hoult