Balshaw v Crown Prosecution Service

On 4 September 2008 the Crown Court at Reading ordered the appellant to pay prosecution costs of £9,000 and an additional £13,600. The additional £13,600 represented the costs of a report prepared by a director of KPMG LLP for the court.

The order that the appellant pay those costs appears, at first blush, to be unsurprising, since the appellant had been convicted for conspiracy to supply to a co-accused tools and accessories at minimal cost in exchange for cash payments made directly to the appellant. His Honour Judge Wood ruled that the value of the criminal benefit obtained by the appellant was £440,000 and that his realisable assets were in the region of £900,000.

However, the accountancy report, prepared for the court on 1 June 2007, was commissioned by the Economic Crime Unit of the ThamesValleyPolice after the defendants had been charged. The fact that the report was commissioned by ThamesValleyPolice and not by the Crown Prosecution Service lies at the heart of this appeal. The appellant contends that since the report was commissioned by the police and not by the CPS the court either had no jurisdiction or was wrong to order that the applicant pay the costs of that report. During the course of the oral hearing we gave leave to the appellant to advance these contentions.

The appeal turns on the question whether the order that the appellant pay the costs of £13,600 for the accountancy report to the CPS was “just and reasonable”. S.18 of the Prosecution of Offences Act 1985 (the 1985 Act) provides that:-

“(1)

Where - …

(c)

any person is convicted of an offence before the Crown Court:

the court may make such order as to the costs to be paid by the accused to the prosecutor as it considers just and reasonable”

Thus, the only inhibition on the award of the costs in issue in this appeal is whether it was just and reasonable to order that the costs of the accountancy report be paid to the CPS when those costs had been incurred by the ThamesValleyPolice.

The impact of the statutory requirement that costs be paid to the prosecutor underlies past contentions that the costs of prosecution are to be distinguished from the costs of investigation. In R v Burt ex parte Presburg [1960] 2 WLR the court was considering the statutory predecessor to the 1985 Act. S.6(1) of the Costs in Criminal Cases Act 1952 conferred power on a Magistrates’ Court to make an order as to costs:-

“to the prosecutor…as it thinks just and reasonable.”

Prosecutor was defined as including a person at whose instance the prosecution had been instituted or under whose conduct the prosecution was carried on (see s.17(1)). In that case a prosecution for failing to comply with a traffic sign was brought by the Metropolitan Police which claimed the costs of the attendance of a police constable at court to give evidence. The Divisional Court expanded upon the reasons given by the Bow Street Magistrate, Mr Clive Burt QC, who had informed the applicant’s solicitor that the reason why he had ordered costs was “because I say so”. The court held that costs should not be limited to additional costs such as disbursements and expenses but could include the costs of a police constable whose salary was paid by the prosecutor but who had incurred no such additional or “marginal” costs.

The proposition that the costs of the prosecution may include the costs of investigation where the prosecuting body carried out the investigation was doubted some 27 years later in this court in R v Seymour [1987] 9 Cr App R(S) 395). In order to understand the origin of that doubt it is necessary to look back to the decision in R v Maher [1983] 1 QB 784 which restricted the DPP’s costs to those costs of the prosecution which would be payable out of central funds. Such costs were limited to those which were sufficient to compensate the prosecutor for expenses properly incurred by him in carrying on the proceedings and to compensate any witness (costs out of central funds identified in s.3(3)) of the Costs in Criminal Cases Act 1973). But it is important to note that the section which governed the order made after what was at that time the longest criminal trial in England, was s.4 of the Costs in Criminal Cases Act 1973 which limited the power to order costs to those:-

“incurred in or about the prosecution and conviction including any proceedings before the examining justices.”

The court, accordingly, refused to allow costs of overtime payments or travelling expenses of officers engaged in the investigation and for security at Lancaster Castle and the Judges’ lodgings.

Eight months later the fact that the provisions s.4 of the 1973 Act were more restricted than s.2 of that Act was recognised by the Divisional Court in Neville v Gardner Merchant Limited [1983] 5 Cr App R (S.349). The more liberal provisions of s.2(2) of the Costs and Criminal Cases Act 1973, like its predecessor in 1952, provided:-

“On the summary trial of an information a Magistrates’ Court shall, on conviction, have power to make such order as to costs to be paid by the accused to the prosecutor as it thinks just and reasonable.”

The court held that Westminster City Council, prosecuting under the Food Hygiene Regulations 1970, was entitled to the costs of its employer, the Environmental Health Officer, who had conducted the information.

The doubt triggered by Maher in relation to the cost of investigation was expressed by this court in R v Seymour [1987] 9 Cr App R (s.395). The court failed to observe the distinction between the less restrictive provisions in s.2(2) when compared with the provisions of s.4. The court was considering the provisions of s.18 of the 1985 Act, the provisions in question in the instant appeal. In a prosecution for damage to a scheduled monument which it was alleged had been caused by the Eighth Marquis of Hertford at Radley Hall, the court substituted a fine of £3,000 for one of £10,000 and declined the costs of the investigation by English Heritage, which, it pointed out, was not the same body as either the Police or the Crown Prosecution Service. The doubt it expressed was obiter. Stocker LJ, giving the judgment of the court, said of s.4 of the Costs and Criminal Cases Act 1973, and s.18 of the Prosecution of Offences Act 1985, the relevant Act in that appeal, that :-

“We are minded to accept that the principle is probably the same.”

Not so, said the Court of Appeal in R v Associated Octel Limited [1997] 1 Cr App R (s.435). The court held that the doubts expressed in Seymour were per incuriam since Neville v Gardner Merchant had not been cited (page 440). It held that the costs of the prosecutor, the Health and Safety Executive, might include the costs of the investigation in a case where the investigating body was the same as the prosecution. The commentary in Criminal Law Review 1997 (pp 144-146) suggests that it would only be just and reasonable to order such costs where the investigating body and the prosecuting body were the same, as in Octel itself, Gardner Merchant and ex parte Presburg.

During the course of argument, contrary to his written submission, Mr Miskin QC accepted that the question was not a matter of jurisdiction. The only inhibition on the order for costs in respect of a report commissioned by the police and not by the CPS was the requirement that the costs should be paid to the prosecutor and that they should be just and reasonable. His submission was confined to the proposition that since the CPS had incurred no liability to KMPG to pay it for the report it could not be just and reasonable to make an order in its favour.

Support for that proposition is to be found in the commentary to which we have already referred in the Criminal Law Review and in Blackstone’s Criminal Practice 2009 Edition at D30.20:-

“It is submitted that the position would be different where different bodies investigated and prosecuted (e.g., the police and the CPS respectively). It would not seem to be ‘just and reasonable’ for the court to order the defendant to pay the prosecution in respect of costs for which it was not liable.”

Both support the proposition that it is not just and reasonable to order an accused to pay costs to a prosecutor in respect of sums for which the prosecutor is not liable.

The authorities to which we have referred establish that the mere fact that the costs relate to investigation and not to the conduct of the prosecution does not preclude a court from ordering an accused to pay them. But it seems clear to us that to order an accused to pay costs to a prosecutor for which it is not liable is neither just nor reasonable. But the proposition must not be taken too far. Mr Miskin QC suggested that unless the prosecutor had incurred a contractual liability for the sums it claimed as costs it would not be just and reasonable to make an order against an accused. We do not agree. Provided that the order does not lead to a windfall in favour of the prosecutor or to a disguised fine or penalty we see no reason why it would not be just and reasonable to make an order to the prosecutor in respect of sums which the court is satisfied are part of those costs of investigation which the prosecutor will itself satisfy.

There is no principle that an order is proscribed where the costs are designed to compensate a third party. The CPS’s disbursements to professionals such as a barrister or a pathologist are recoverable. Nor is there any principle that the CPS may only recover those costs which it has directly incurred. The statute does not necessarily prevent the recovery by a prosecutor of fees which it will pay to another body which has itself incurred liability to pay those fees. In such a case the court need only be satisfied that it is just and reasonable for the prosecutor to meet those fees.

In the instant case the costs were not incurred in the initial investigation but only after charge. The report might equally have been commissioned by the CPS rather than by the Economic Unit of the ThamesValleyPolice. The report did not amount to primary evidence but was an important analysis of sources of income identified and unidentified in the bank accounts of two of the conspirators. If the court could not be satisfied that the Crown Prosecution Service would compensate the police for the fees they paid to KPMG it should not have made the order. But the application was made by counsel for the prosecution who made it clear to the court that, although he was acting on behalf of the CPS, the costs were sought by the CPS on behalf of the police and would, accordingly, be passed back to the police to compensate it for the fees paid to KMPG. Since the CPS was, thereby, acknowledging its obligation to pay any award of those fees to the police in respect of the report and the report formed an important part of the CPS’s presentation of the case, the judge was correct to conclude that the order was just and reasonable.

We should add, however, that that was not the only reason which His Honour Judge Wood gave for making the order. In the course of a careful judgment dealing not only with costs but confiscation and compensation he suggested that the police were part of the prosecution authority (see § 12). That was not correct. The CPS is separate and distinct from the police with separate powers and budgets.

But the judge’s conclusion that the costs, which included the costs of the report, were just and reasonable, cannot be impugned. The costs incurred by the police were costs relevant not only to the investigation but also to the presentation of the case at trial. The nature of those costs and the fact that they were costs which were to be passed on by the CPS, in our judgment, affords a sufficient basis for making the order in this case.