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Conduct powers and costs

Cutbacks iStock 000013353612XSmall 146x219A Family Court judge has recently handed down a key ruling for both local councils in respect of adverse costs orders in family and human rights litigation. Jessica Swanell reports.

In the case of CZ (Human Rights Claim: Costs) sub non (1) AZ (2) BZ (3) CZ (child by his children’s guardian) Kirkless Council [2017] EWFC 11, when CZ (the Child) was one week old, the local authority issued an application seeking public law orders out of concern about CZ’s parents' long term parenting capacity.

The hearing took place the same day the application was issued. CZ’s parents were neither present nor represented. An interim care order was made. CZ was removed from the parents’ care and placed into the care of the paternal grandparents. The separation lasted for 11 weeks. The parents applied for declarations that the local authority had violated their rights under ECHR article 6 and article 8.

The parents were in receipt of legal aid to pursue the case against the local authority.

The local authority conceded and confirmed that it had breached the parents’ ECHR rights under article 6 and 8. The local authority had failed to inform the parents of the hearing regarding the public law order for CZ’s care.

The issues in this case involved (1) whether damages were appropriate and (2) if so, whether the costs award should cover the whole period of litigation so as to spare the damages awards from being subject to the legal aid statutory charge.

The parents argued that a full costs award should be ordered:

  • Under the court’s discretion under Human Rights Act 1998 s.8(1);
  • On the basis of the local authority’s unreasonable conduct, and;
  • In order to be an ‘effective’ remedy under ECHR article 13, the compensation had to be received in full, thus they had to recover their costs in full.

1. Were the damages appropriate?

In respect of issue (1), the parents were both awarded compensation in the sum of £3,750.00.

2. Should the costs award cover the whole period of litigation?

In respect of issue (2), it was not as simple as making an order for costs for the unsuccessful party to pay the successful parties’ costs given the legal aid statutory charge.

The discretion applied to the Court in section 8(1) of the 1998 Act did not oblige the court to make a costs award simply in order to achieve a ‘just’ outcome under section 8(3). If parliament had intended for costs to be exempt from the statutory charge, it would have made a provision for the same in the Civil Legal Aid (Statutory Charge) Regulations 2013.

The parents applied for their costs in the care proceedings as well as the human rights proceedings. The costs incurred in respect of the care proceedings are determined with reference to the court’s wide discretion in the Family Procedure Rules 2010, rule 28 whereas those incurred in the human rights claime are determined under CPR44.2(2)(a).

However, given the parents’ litigation conduct in the human rights proceedings for failing to try to settle their claims with the local authority, they were penalised for claiming their costs for the whole litigation period. In accordance with P v. A Local Authority [2016] EWHC 2779 (Fam) each party must conscientiously try to settle their claims, failing which this leaves the party open adverse consequence on their usual costs entitlement.

In respect of the costs in the care proceedings, the parents had failed to establish that the local authority had acted unreasonable so were not awarded their full costs.

The trade-off for receiving public funding was that the statutory charge would apply, thereby enabling the Legal Aid Agency to recoup its costs. The parents interpreted the 1998 Act to bypass the Legal Aid, Sentencing and Punishment of Offenders Act 2012 which is wholly incorrect.

The judgment

Mr Justice Cobb set out in his judgment the essential principles to follow in the court exercising its discretion on costs in family proceedings:

  1. It is relatively rare to make an order for costs in children cases, see London Borough of Sutton v. Davis (Costs) (No.2) [1994].
  2. Local authorities have a duty to investigate allegations of child harm, and should be protected from orders on costs if on investigation the allegations provide to be without foundation (Re T).
  3. Every party has their part to play in assisting the court to reach the right conclusion in the interests of the child, see Baroness Hale in Re S.
  4. There is a public policy element to this approach, see Cazalet J in Re M (Local Authority’s costs) [1995] 1 FLR 533.
  5. Where a local authority has caused costs to be incurred by acting in a way which is unreasonable or reprehensible, justice may well require that the local authority pay the costs in question: see London Borough of Sutton v Davis (Costs)(No.2) (above), Re T (above) at [44], and Re L (Costs of Children Proceedings) [2014] EWCA Civ 1437 ([38]-[41]); examples of such cases include: Re R (Care: Disclosure: Nature of Proceedings) [2002] 1 FLR 755; Re X (Emergency Protection Orders) [2006] EWHC 510 (Fam), [2006] 2 FLR 701; Coventry City Council v X, Y and Z (Care Proceedings: Costs) [2011] 1 FLR 1045.
  6. There is no fixed or defined category of case within which costs could or should be awarded. Baroness Hale in Re S expressed the view at paragraph [31].
  7. If the family proceedings had been essentially adversarial in nature (i.e. appeal against refusal of day nursery registration), costs may well follow the event: see again Wilson J in London Borough of Sutton v Davis (Costs)(No.2).
  8. If ‘real hardship’ would be caused to a party in achieving an outcome in the best interests of the child, that may provide a proper basis for a costs order – per Baroness Hale in Re S at paragraph [33].

On ordinary costs principles, Mr Justice Cobb awarded the parents recovery of their costs of the HRA 1998 proceedings from the grant of certificates up to and including 14 July, but no further.

In relation to the costs of the CA 1989 proceedings, as the parents had failed to prove that the local authority behaved ‘reprehensibly’ or ‘unreasonably’ the parents would only be entitled to the costs of the CA 1989 proceedings for the limited period from 13 November to 7 December 2015.

Conclusion

Despite the parents being successful in the litigation, given their poor conduct, adverse consequences were applied. Given the following, the parents had their entitlement to costs restricted:

  • They failed to respond constructively to the local authority’s efforts to achieve a settlement;
  • They did not make any settlement offers, despite being invited to by the local authority;
  • CZ’s guardian did not respond positively to the request to provide costs schedule at an early stage;
  • The parents made offers either side of the CMC;
  • There was no response to offers made by the local authority, and;
  • The parents did not comply with the directions order.

What is clear from this case is that conduct is and remains very important. Every profession involved in litigation must always consider the overriding objective throughout the life of the litigation.

If you consider there to be poor conduct from the other side, be sure to always put the other side on notice of the same and reserve your position in respect of costs or always ensure that a detailed note is made on the file for consideration when the question of costs presents its self.

Jessica Swannell is a Costs Lawyer & Practice Manager of A&M Bacon Limited. She is a specialist in Central and Local Government costs litigation and a member of the CCS Costs Draftsman’s framework agreement. Jessica can be reached This email address is being protected from spambots. You need JavaScript enabled to view it..

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