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At the sharp end

In the current financial climate, respondent licensing authorities are understandably sensitive about being made responsible for costs; especially when it is interested parties or responsible authorities that insist on a contested hearing. Roy Light considers the issue of costs in licensing appeals.

Background

The Licensing Act 2003 provides for a right of appeal to the magistrates’ court against decisions of licensing authorities (s.181 and sched.5) and under s.181(2) a magistrates’ court ‘may make such order for costs as it thinks fit’. As the appeal is by way of complaint, this effectively duplicates the provisions under s.64(1) Magistrates’ Courts Act 1980 which provides that the court has ‘a power in its discretion to make such order as to costs … as it thinks just and reasonable’.

The DCMS Statistical Bulletin published in October 2009 showed that in the year to 31 March 2009 there were some 170 completed appeals against application decisions and 140 completed appeals against licence review decisions (these figures are probably slightly low as not all authorities supplied the necessary data). Not all of these would have gone to a contested hearing. In some cases (although the statistics do not help us with how many) agreement would have been reached between the parties and a consent order placed before the court. The order would lay out the basis upon which the application or review decision was settled together with an agreement as to costs.

Respondent licensing authorities, particularly in today’s economic climate, are understandably and quite rightly sensitive to costs in licensing appeals. As respondent they sometimes find themselves in the difficult situation of being at risk of costs although it is the police or interested parties who are pressing for the matter to go to a contested hearing – at which the authority and not the interested party/responsible authority may be at risk of a costs order made against them.

Caselaw

The leading case is City of Bradford Metropolitan District Council v Booth [2000] LLR 151 which decided that the civil law proposition of ‘costs following the event’ was not applicable in licensing cases. Rather ‘…a local authority ought not to be ordered to pay costs unless it has acted unreasonably, improperly or dishonestly’ (para.10) and should not be deterred from its public duty by the threat of costs. Three recent cases have considered the principles laid down in Booth.

R (on application of Cambridge City Council) v Alex Nestling Limited [2006] EWHC 1374 (Admin) - Mr Justice Toulson quashed the award of costs against the respondent, holding that ‘the fact that the Local Authority has acted reasonably and in good faith in the discharge of its public function is plainly a most important factor’ (para 11). The Crawley case, decided eight days previously, was not cited to the court.

In Crawley Borough Council v Attenborough [2006] EWHC 1278, decided eight days before Nestling, Lord Justice Scott Baker (sitting with Openshaw J) noted that in licensing appeals ‘the justices have a very wide discretion in what costs order they seek fit to make’ (para 12) and rejected the proposal that before ordering the local authority to pay all of the appellant’s costs it was necessary to make ‘a finding that the local authority had behaved unreasonably’ (para 13) but ‘if the magistrates had all material matters in mind and it was within the ambit of their discretion to make the order’ (para 15) – which would include the principles in the Bradford case - that order would not be interfered with. Both the Crawley and Cambridge cases support the principle in Bradford that costs do not necessarily follow the event in licensing appeals but came to different decisions.

Uttlesford District Council v English Heritage [2007] EWCH 816 (Admin), considered the Bradford, Crawley and Cambridge cases. Pitchford J stressed that Lord Bingham’s guidance in Bradford was to draw attention to the public role of the authority as a factor which would need to be weighed in the balance when considering the issue of costs. The facts of each case were to be looked at individually and it was open to the magistrates to make an order for costs. Here Pitchford J said ‘having considered [the Justices’] reasons, I do not take the view that they fell into error. They were plainly concerned that a fully contested hearing was unnecessary. It had been made necessary by the refusal of the District Council to engage in useful negotiation on the main issue which was resolved in favour of English Heritage. They were perfectly entitled to form that view.’ (para.17).

The magistrates’ therefore have a wide discretion to award cost but should not do so against an authority simply because it was unsuccessful in defending the appeal. Rather the court should look at the reasonableness of the authority’s actions. And it is clear from Uttlesford that this includes the period between the authority’s decision and the hearing as well as during the hearing itself. An authority may be at risk of costs if it refused to attempt to settle the appeal or rejected an offer of settlement where the appeal was decided on those same terms. (Some authorities agree with appellants that whatever the outcome of the appeal each side will bear its own costs.) It is within the spirit of the Act and in the interests of all parties to avoid a hearing where possible; providing, of course, that the authority can feel confident that it is fulfilling its duty to promote the licensing objectives.

Roy Light is a barrister practising from St John's Chambers, Bristol and professor of law at Bristol Law School

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