A local authority could potentially have to pay more than £50,000 in costs to grandparents cleared by a fact-finding enquiry into allegations of sexual abuse, the Court of Appeal has ruled.
The case of T (A Child)  EWCA Civ 1585 centred around care proceedings brought by the council in relation to two of the grandchildren of the appellants. These proceedings are understood to still be pending.
The grandchildren had made allegations of sexual abuse and other abuses against a number of adults including, in particular, their father but also their paternal grandparents.
The county court judge, HHJ Dowse, conducted a bespoke fact-finding enquiry that lasted for five and a half weeks, spread between February and December 2009. This led to a judgment running across 2,719 lines set across 81 pages.
The allegations against the grandparents were that they had been involved in causing physical, sexual and emotional harm to the children and had failed to protect them from abuse perpetrated upon them by the father and six of his acquaintances.
After completing his enquiry, the county court judge did not find any of the allegations against the grandparents established, nor were they consigned to a pool of possible perpetrators of the acts of which they had been accused.
Judge Dowse “exonerated” the paternal grandparents but refused to make an order for costs in their favour. The grandparents, who had taken out a £55,000 building society loan to pay for advice and representation, appealed. The solicitors’ fees amounted in the end to £52,000.
Giving the lead judgment, Lord Justice Wilson said: “It was and is common ground that it was appropriate for the local authority to invite the court to determine the allegations against the grandparents; and that the way in which….the local authority conducted themselves during that hearing cannot be criticised.”
He added: “It was and is also agreed that, although many of the principles in relation to costs set out in CPR Parts 43 and 45 apply to costs in family proceedings by virtue of Rule 10.27(1) of the Family Proceedings Rules 1991, there is an important exception. The exception, provided by Rule 10.27(1)(b) thereof, is that the general rule in CPR 44.3(2)(a) that the unsuccessful party will be ordered to pay the costs of the successful party does not apply to family proceedings.”
However, Lord Justice Wilson said HHJ Dowse had gone further by applying part of the Court of Appeal judgment in Re J (Costs of Fact Finding Hearing)  EWCA Civ 1350 – citing part of Sutton London Borough Council v Davis (No. 2)  2 FLR – and quoting Re M (Local Authorities Costs)  1 FLR 533. The county court judge had concluded that, in that it had been reasonable for the local authority to pursue the allegations against the grandparents, the door to a successful application for costs on their part was not open.
Lord Justice Wilson said he was “perplexed” by the treatment of the Re J decision “both by and before the judge and indeed in this appeal”. The Court of Appeal judge pointed out that in Re J he had gone on to say that the general proposition did not apply to the costs of a fact-finding hearing.
“In my judgment the exercise of the judge’s discretion in the present case was flawed because he purported to apply the general proposition in favour of no order as to costs,” he added.
Lord Justice Wilson said: “I consider that, where in care proceedings a local authority raises, however appropriately, very serious factual allegations against a parent or other party and at the end of a fact-finding hearing the judge concludes that they have not established them, the general proposition is not in play…..
“It does not, however, follow that the judge should automatically have ordered the local authority to pay the costs of the grandparents. The general rule that costs should follow the event did not apply. Nor however did the general proposition that there should be no order for costs in proceedings relating to children. In truth the judge should have started with a clean sheet.”
The Court of Appeal judge said: “In my view the facts that the grandparents had been faced with allegations of the utmost severity, that accordingly it had been reasonable for them to stretch their economy to the utmost in order to secure for themselves a professional defence against them and that in the event the result was an exoneration, were all matters which should have been of great, indeed in my view of decisive, importance to a judge who was about to write on a clean sheet.”
Lord Justice Wilson ruled that the proper order was that the local authority should pay the costs of the grandparents of and incidental to their intervention, although assessed on the standard rather than the indemnity basis in default of agreement.
The local authority’s desire to challenge the decision of the grandparents’ solicitor to remain in court throughout the five and a half weeks of the enquiry should be taken before the costs judge.