Goodman & Anor v Secretary of State for Constitutional Affairs

The graduated fees scheme now in force under the Access to Justice Act 1999 contains provisions for the determination of defence advocates' fees. Such provisions are found in the Criminal Defence (Funding) Order 2001 No.855 as amended ("the Funding Order"). By Article 5 of that order remuneration in respect of relevant proceedings is to be in accordance with the provisions of Schedules I to IV. In Schedule I provision is made for the determination of costs by an appropriate officer and for a fee order and such determinations to a costs judge. By para.22(3), where a costs judge certifies a matter of general importance an appeal lies to the High Court against the decision of the costs judge.

This is an appeal under para.22(3) of schedule I. The appellants, Messrs. Jonathan Goodman and Philip Farr, appeal against the decisions of Master Rogers dated 24 May 2006 rejecting their appeal from the decision of the appropriate officer. The case concerns the proper construction of para. 1(2) of Schedule IV to the Funding Order. That sub-paragraph states as follows:

The question before Master Rogers was whether DVDs and inlays referred to in a prosecution evidence schedule constituted "pages of prosecution evidence .... forming part of the committal documents or served prosecution documents". The appellants say that they do. The respondent denies that these particular DVDs or inlays properly fall within that definition.

For the purpose of this appeal, Master Rogers identified four questions which, taken together, comprised a principle of general public importance. These were as follows.

A helpful account of the factual background was provided in the respondent's skeleton argument and, after certain factual inaccuracies were corrected, this section of my judgment draws heavily on that account.

Mr. Goodman, as leading junior, and Mr. Farr, as led junior, represented Mr. Sidney Eric Austin under a representation order dated 21 October 2003, which was amended on 29 April 2004 to authorise the instruction of two junior counsel. The defendant was sent to Snaresbrook Crown Court on 28 November 2003 with a co-defendant, Mr. Simm, and was charged with one count of conspiracy to defraud at common law. The particulars of offence stated as follows:

The prosecution alleged that the defendants supplied approximately 400,000 DVDs and made gross profits in excess of £2.5 million during an 18 month period. Mr. Simm was alleged to be the prime mover; Mr. Austin was said to be a full partner and shared equally in the profits. Mr. Austin pleaded not guilty to the indictment and following a ten day trial was convicted and received a sentence of four years imprisonment. His co-defendant, Mr. Simm, pleaded guilty to a variety of charges, including conspiracy to defraud, and received a sentence of three years imprisonment. Each defendant also received a confiscation order under the Proceeds of Crime Act 2002.

Both counsel submitted claims for payment under the graduated fees scheme. Mr. Goodman claimed some £404,724.01, including VAT; Mr. Farr sought £269,745.76, including VAT. The sum due to counsel for a trial not exceeding ten days is given by a formula which I shall set out in the section of this judgment dealing with relevant legislation. The vast majority of each claim comprised evidence uplift of some £394,054.39 for Mr. Goodman and some £262,702.92 for Mr. Farr, both figures including VAT. The evidence uplift was based on a rate per page of £1.86 and £1.24 respectively, with the number of pages claimed as 180,304.

Such a claim could not now be made, for the regulation has been amended so that the maximum number of pages has been limited to 10,000 from 2 August 2004. There was no limit at the relevant time for the purposes of these claims.

Counsel submitted an evidence schedule produced by the prosecution listing 1,038 numbered pages. They reached the figure of 180,304 by adding to the 1,038 pages and other pages of documents served during the course of the trial each of 51,615 DVDs as an individual page and each of the inlays which were documents designed to go inside the DVD cases amounting to 122,205, again each of them as an individual page.

It is common ground that the prosecution did not go to the expense of taking photographs of the DVDs and inlays nor of copying any such photographs so as to serve such copies on the defence.

The defence were sent three lever arch files with the 1,038 numbered pages of evidence. Mr. Farr, as junior defence counsel, attended a depot where the DVDs and other exhibits were stored. He was allowed to take a handful of DVDs. He saw the inlays. He did not, however, view the DVDs in the sense of watching the relevant motion pictures.

The determining officer allowed a total of 1,956 pages of prosecution evidence, this being the figure given by the court clerk at the end of the trial. The result was that for a ten day Mr. Goodman received £13,798.84 and Mr. Farr £9,168.62, both figures including VAT. Counsel made an application for re-determination under para.20 of Schedule I of the Funding Order and submitted in support a letter dated 5 May 2005 from prosecution counsel, Mr. D. Groom, which stated that the DVDs and inlays referred to in the exhibits schedule were served on the defence as used material. However, the determining officer maintained her original decision giving reasons on 20 December 2005.

Counsel appealed to Master Rogers who was due to hear the appeals on 30 March 2006. However, the Master adjourned the hearing and invited the Lord Chancellor to submit representations on the appeal pursuant to para.21(6) of Schedule I to the Funding Order. Those representations were duly submitted on 11 April 2006. Counsel responded to them on 2 May 2006. On 24 May 2006 Master Rogers dismissed the appeal.

Provisions for the graduated fees are found in Schedule IV to the Funding Order. I set out below passages from Parts I and II dealing the general matters and the calculation of the graduated fee. I also set out matters from Schedule IV, Part IV, which is headed "Fixed and Hourly Fees". It is apparent from Part IV that there are circumstances where additional matters may be claimed for over and above the graduated fee calculated according to the formula.

The grounds of objection added that the graduated fees scheme was to be interpreted strictly. In this regard the notice of objection said this:

The response on behalf of the Secretary of State contained as its essential submission three paragraphs as follows:

In his judgment Master Rogers said that, while he could understand and follow the arguments of the appellants, he shared Master Campbell's unease expressed in Rigelsford that tens of thousands of pounds should be paid to counsel for not looking at a number of photographs even though they were formally served. In this case, significantly, counsel admit that they did not look at every DVD or inlay. Nonetheless, not without hesitation, Master Rogers came to the conclusion that the submissions of the Department for Constitutional Affairs, both in paras.8 and 9 of their submission, should prevail, and for that reason he held that the appeal failed.

On behalf of the appellants before me, Mr. Goodman, rightly in my view, observed that para.9 of the submission of the Department of Constitutional Affairs was, on the face of it, inconsistent with para.8 if, as was contended in para.8, the words "pages" and "documents" must be given their literal meaning. It ran entirely counter to that approach to submit that there is some discretion available to the appropriate officer or the costs judge enabling the relevant authority to avoid paying out the sums which were, on the face of it, due to counsel.

Indeed Mr. Sachdeva in the course of Mr. Goodman's oral submissions conceded that there was no super-added discretion under Schedule IV of the Funding Order. If, on its true construction, the provisions in the Schedule provided for payment of a particular sum then there was no additional mechanism entitling the Department to claim that there should be some reduction on grounds of general unfairness.

Among the authorities provided to the court by Mr. Sachdeva was the decision of Gray J. in Secretary of State for Constitutional Affairs v. Stork [2006] 1 Costs Law Reports 69. At para. 15 Gray J. recorded this by reference to the tables of fees and uplifts in Schedule IV:

Having read that paragraph I decided that it would be appropriate to ask my assessors whether they agreed with what was said there. My assessors have told me that they both agree with the content of this paragraph. I informed counsel that this was the case and I was told that neither counsel sought to suggest that there was anything inaccurate in that paragraph. The essential conclusion supported by that paragraph is that one must recognise that this scheme is one which has a large element of "swings and roundabouts".

Mr. Goodman took me to a number of cases where the swing had operated against counsel. I accept the essential proposition that he was advancing, which is that this scheme is mechanistic and formulaic and the court is obliged to recognise that and indeed in the application of the scheme the court will have to apply a mechanistic and formulaic approach.

The question which remains, however, is what does the scheme mechanistically and formulaically require? As to that, Mr. Goodman submitted that the scheme itself gives little assistance as to what a page or a pictorial or documentary exhibit is. He submitted, however, that the inlay and the picture on the face of the DVD, which of course has a side containing graphical material and writing to indicate the name of the motion picture and give information about it, along with a side which could be called "the silver side", which is read by the DVD player, could in each case be categorised as one page of a document or pictorial exhibit. In that regard, he was at pains to explain that American film studios rarely press their own DVDs. They license operators in third countries to do so. Malaysia is pre-eminent as a place where DVDs are stamped in this way. Each time a code is embossed on to the silver side of the DVD. The code shows the maker. What was suggested in the present case was that Malaysian factories were working at night producing additional copies indistinguishable from those legitimately made in the day. In order to remove the code an alcohol based was wiped across the DVD. An expert for the prosecution produce a witness statement and in indicating whether the DVDs were legitimate the prosecution on one or more of the pictures on the side of the DVD, the inlay and the motion picture actually seen by viewing the DVD.

In this particular case the inlays did not have the British Board of Film Censors logo and, without such a logo, it was accepted that the sale of the DVDs covered by those inlays must be illegal. It was accepted by both defendants that they had no authorisation from film producers, so where such authorisation was required they could not normally sell in this country. There were some cases where such authorisation was not required - Mr. Goodman said as many as 15 per cent - but the defence saw no purpose in wasting public money in identifying what that 15 per cent would be, given that 85 per cent would remain.

In relation to what was claimable under para.7 of Schedule IV, Mr. Goodman accepted that the appropriate officer had to work by reference to what was a page. In a case where the prosecution took four photographs and copied all four on to one page for the purposes of serving their evidence, then Mr. Goodman accepted that that would be a single page.

In this case, however, he said that what happened, in effect, was that each individual inlay and each individual side of a DVD with a picture and writing on it became a single page.

Turning to the history he noted that a bundle had been provided by the Trading Standards Officer which gave an initial schedule of DVDs and inlays. However, that was not specifically relied upon for the purposes of the present appeal. What was relied upon was a schedule of evidence lodged by the prosecution within 42 days of the first hearing under Regulation 2 of the Crime and Disorder Act 1998 (Service of Prosecution Evidence) Regulations 2000. That was effectively, submitted Mr. Goodman, to be treated as the committal bundle.

He summarised the effect of the authorities as being that the question was what was "used material". Where the prosecution decided to take only samples and rely only on samples at trial then it was clear that the defence counsel, although they might have to look at others, indeed a large volume of others, in order to satisfy themselves that a sample was appropriate, would not be a good claim that the pages in relation to the other material were pages for which they could claim.

In this case, however, that procedure was not followed. The prosecution decided they wished to use each and every item. Mr. Goodman acknowledged that it would have been possible to watch the DVDs and thereafter to make a claim under para. 19 of the Schedule. He said that the conclusion of the defence team was that this would have been a waste of the public purse and it was for that reason that the DVDs were not watched.

I explored orally with Mr. Goodman the approach which he was advocating to the question of what constituted a page of documentary or pictorial exhibits. His submission was that where a DVD was relied on solely for the motion picture that could be looked at by viewing the DVD then the DVD would not be a page. He returned to this submission during the course of later discussion, and I shall come on to that shortly.

I asked him whether the use in the Schedule of "number of pages of prosecution evidence" might not be an attempt to find a very rough and ready measure of one aspect of how heavy the case is. To put it colloquially, the natural question that a barrister or a barrister's clerk might ask when being told that counsel is wanted for a particular hearing is, "How much paper is there in it?" Mr. Goodman accepted that that was so. It could be seen in para. 18 that one measure of which case this would give rise to a claim for work done when attendance proved impossible was that the case actually went to trial and lasted five days or more. An alternative measure for those cases which did not go to trial was that the volume of paper amounted to 150 pages. There had in the past, Mr. Goodman noted, been arrangements under the graduated fees scheme under which the volume of paper could take cases out of the graduated fees arrangements.

He made it clear that it was the appellant's case to say that they were claiming a fair remuneration, they simply observed that where rigid interpretation of the scheme had resulted in perceived unfairness to counsel, those swings had to be accepted because that was the way the scheme worked. This particular instance under which quite substantial payments would be made in respect of material that did not need to be the subject of any detailed study could be a roundabout, however unpalatable it may be when looked at its own. There were, he submitted, implications for the Bar generally.

An example had been given by Mr. Sachdeva in his skeleton argument of a case where one of the prosecution exhibits was the Complete Works of Shakespeare. Could it be right that prosecution counsel were entitled to treat a shoplifting case as a particularly heavy case because the volume that was stolen was the Complete Works of Shakespeare, running to more than 1,000 pages in the printed text? Mr. Goodman observed that so far as the prosecution were concerned, the contents of the volume were irrelevant. In a case where the contents were an essential ingredient then, he submitted, each page in the book would be a page of evidence. However, where the contents were not an essential ingredient then the pages in the book would not be a page of evidence unless, he said, the prosecution chose to photocopy them. Thus if they chose to photocopy and serve the title page only that would be one page; if they chose to photocopy and serve more pages then however many pages it was that they copied and served, that would be the number of pages for the purposes of Schedule IV. He accepted that in a shoplifting case if nothing were copied then there would be no claim.

At the relevant time the phrase "number of pages of prosecution evidence" appeared twice in Schedule IV. In my view, on both occasions where that phrase was used, the Schedule was making reference to this criterion as a means of assessing how heavy a particular case is. Thus, when it is used in para.7, the heavier the case is in terms of the weight of the documents, the greater the prosecution evidence allowance element will be in the graduated fee.

Similarly, in para. 18, as indicated above, the number of prosecution pages of evidence is used as a criterion in order to determine whether a particular specific payment should be claimable.

It is plain that this is a very rough and ready process. As stated in the judgment of Gray J. in Stork, there are swings and roundabouts. It seems to me that it is inevitable that such swings and roundabouts cannot be expected to operate in a way which will be necessarily fair in any particular case.

The question which arises in the present case as it seems to me is what is to happen where real exhibits are used material? I say that because, to my mind, the inlays and DVDs all constituted material which fall into the well known category of real evidence. They are things which the defendants were dealing with and which the prosecution said the defendants were dealing with unlawfully.

It seems to me that there will be many different types of real evidence. One, for example, may be stolen cash. Indeed, items of cash were listed in the schedule of evidence in the present case. In a case where the prosecution intends to allege that cash has been stolen, it would be astonishing to find that cash forming part of a committal bundle. It would not be produced to the magistrates at an old-style committal so as to be transmitted to the court. It would be held along with other exhibits in the case by the prosecuting authorities. It cannot, to my mind, be sensible to describe cash as a served documentary or pictorial exhibit even though it has writing and pictures on it. It is simply real evidence. However, if the prosecution choose to photograph it and serve copies of those photographs then it will form part of the prosecution evidence. The number of pages that this gives rise to is going to depend on a matter of chance. As Mr. Goodman concedes, it simply depends on how many photos are on a particular page. It will be pure chance as to how many pages there will be. It may be pure chance as to whether the prosecution choose to take photographs of the cash, make copies of those photographs and include them in the material which is part of the prosecution documents.

I cannot accept the argument put forward by Mr. Goodman that there should be some additional analysis to be made by the appropriate officer in a case where the prosecution has not taken the step of photographing and then copying a piece of real evidence. The submission, as set out above, is that the matter depends upon whether, in truth, the prosecution need to produce the documentary or pictorial elements of the piece of real evidence as part of their case. An analysis of that kind would be a complex analysis and one which I, for my part, would not expect to be required of an appropriate officer under the mechanistic and formulaic approach which is adopted in this schedule.

It seems to me that the schedule has taken a very rough and ready measure indeed. There will be a large element of chance as to how many particular pages are involved in any particular case. It would be very surprising if, tacked on to that, there were to be some refined analysis of precisely for what purpose a particular piece of real evidence was relied upon by the prosecution.

I cannot see any distinction as regards these inlays and DVDs. The schedule has chosen to work by reference to pages of prosecution evidence. That connotes to my mind something which is on a page. One of the cases I was shown raised a question as to whether a page might take the form of an electronic document rather than a hard document. That does not arise in the present case and I need say nothing about it.

I am satisfied, however, that what is needed is that, quite apart from the real evidence, there is produced a page which has been created for the purposes of the prosecution. For whatever reason, that step was not taken in this case in relation to the DVDs and inlays. Accordingly, as it seems to me, this appeal must fail.

As to the answers to the questions formulated by Master Rogers, it is convenient to take question four first. Here it seems to me that the appropriate answer is that in relation to the DVDs and inlays in the present case the question which arises is whether they constituted pages of prosecution evidence. They did not constitute such pages for the reasons given earlier in this judgment.

It is then convenient to take question one. The answer to that question is that, in considering whether a document constitutes a page of prosecution evidence, regard must be had to the mechanistic and formulaic approach which is generally adopted in the schedule. If a claimant establishes that a document or pictorial exhibit does indeed constitute a page of prosecution evidence then there is no super-added discretion entitling the appropriate officer to refuse to allow the claim. In these circumstances, questions two and three simply do not arise.

I have considerable sympathy with the second of these points. It does seem to me that the true nature of the objections to the contentions put forward on behalf of the appellants only really became apparent when the skeleton argument for the Secretary of State was served very recently.

I am influenced by the fact that this was a case where the point certified was one of general public importance, although I note of course that no appeal can be made to this court without such a certification.

However, it certainly seems to me that this is not a case where it is appropriate for an award for indemnity costs. In the light of the very late stage at which the real objections to the case were put forward on behalf of the appellants were made plain by the Secretary of State, I conclude that the justice of the matter would be best served by an order that each side bear their own costs.