Judicial review, settlement and costs

Money iStock 000008683901XSmall 146x219The Court of Appeal has given clear guidance on the issue of costs in judicial review claims where a settlement is reached before trial, writes Catherine Rowlands.

It very often happens that a local authority who is a Defendant to a claim for judicial review thinks that the claim might have some merit or for other reasons wants to settle the claim. That might be for generous reasons – to give the Claimant another chance – or for technical reasons – a deadline missed, a decision taken without all the necessary consents – or because the cost of litigation is too much.

Until recently, a local authority making such a settlement could offer to settle, relying on the unwritten assumption that the Court would make no order as to costs in the vast majority of cases. Then came the case of Bahta – a real spanner in those works. Thereafter, any public authority giving a Claimant any part of what he sought from the litigation would be expected to pay the costs in full. Fortunately, the Court of Appeal has recently softened that position in its judgment in M v London Borough of Croydon [2012] EWCA Civ 595.

Facts

M challenged Croydon’s assessment of his age and claimed to be two years younger. He brought a claim for judicial review, primarily on the basis that Croydon had failed to give proper weight to the evidence of Dr Birch. In November 2009, the Supreme Court gave judgment in R (A) v Croydon LBC and R (M) v Lambeth LBC [2009] UKSC 8 [2009] 1 WLR 2557, changing the way age assessment cases were handled. Thereafter permission was granted, and in due course, the Council instructed Dr Stern. He considered that it was possible that M was the age he claimed, and the Council decided to concede the claim. However, they declined to pay the costs. These were therefore determined by Lindblom J following written submissions from the parties. Relying on R (Boxall) v Waltham Forest LBC (2001) 4 CCLR 258 as explained by R (Scott) v Hackney LBC [2009] EWCA Civ 217 (a judge must not be tempted too readily to adopt the default position of making no order for costs) he made no order as to costs. This was not a case where the outcome was clear from the start.

The Court of Appeal then handed down its judgment in R (Bahta) v Secretary of State for the Home Department [2011] EWCA Civ 895. That case gave a very clear indication that:

  • Public authorities could not expect special treatment in Court;
  • Any degree of success prima facie entitled the Claimant to full costs;
  • Failure to follow the pre-action protocol would be punished in costs.

Sullivan LJ – one of those who gave judgment in Bahta – gave M permission to appeal against the order of Lindblom J.

Judgment

The Court of Appeal took the opportunity to give clear guidance on costs in judicial review claims. The main judgment was given by the Master of the Rolls, Lord Neuberger.  

The general rule as to costs applies: winner gets their costs. However, the Court has a discretion: CPR 44.3(2). The same rule applies to judicial review as to ordinary civil litigation. However, this did not mean that Boxall was wrongly decided. The position on costs is nuanced. Where a Claimant wins on some points and not on others, there is room for a different order as to costs – the harsh position adopted in Bahta is mitigated. Further, even where a litigant has been wholly successful, there may be reasons for not ordering the Defendant to pay the whole of the Claimant’s costs. The Court will need to look at the conduct of the parties, and in particular compliance with the pre-action protocol. In this case, the Court of Appeal held, there were two good reasons the Council could rely on: most importantly, the change in the law between the start of the case and the grant of permission. Until then, the Council was on good ground in defending the claim. Secondly, the unreliability of the Claimant’s “expert” witness, Dr Birch.

The Council was therefore ordered to pay 50% of the Claimant’s costs to the date of the grant of permission and 100% thereafter.

Stanley Burnton LJ took the opportunity to emphasise the desirability of a complete settlement. The Court will have to go through the merits of the case unless there is a clear winner – and that requires an expenditure of time and resources that the court would prefer to expend elsewhere!

Guidance

There are three real lessons to take away from this case.

The first is to recall the requirement laid out in CPR54APD 17.1 that when a claim is settled, the Claimant should file at Court “a short statement of the matters relied on as justifying the proposed agreed order and copies of any authorities or statutory provisions relied on”. This particularly applies in relation to children – it is effectively an infant settlement which requires the approval of the Court. If the agreed statement of facts contains a statement by the local authority of its reasons for settling – a change of circumstances, for example – this will afford protection if the Claimant asserts that the local authority only settled because it was inevitable.

The second lesson is to make a complete offer on costs – rather than asking the Court to rule on the assumption that there will be no order as to costs. The local authority can offer what the Claimant wants from the litigation together with no order as to costs. It’s all about negotiation.

The third, and most important, lesson is that Claimants will no longer be able to rely on Bahta to argue that any degree of success would entitle them to their full costs. If the Claimant succeeds in part only, or on a different basis from that advanced, or has failed to abide by the pre-action protocol, a different order as to costs can still be expected. The Court will need to look at the degree of success, and conduct, in order to decide where costs should lie – as was the case before Bahta.

Catherine Rowlands is a barrister at Cornerstone Barristers. She appeared for the London Borough of Croydon.