Royal Courts of Justice
Strand, London, WC2A 2LL
Before :
MR JUSTICE HOLROYDE
Between :
FREDERIC PETER BREWER | Appellant |
- and - | |
SECRETARY OF STATE FOR JUSTICE | Respondent |
Mr Jeremy Morgan QC (instructed by Layzells) for the Claimant/Appellant
Mr Tim Buley (instructed by The Treasury Solicitor) for theDefendant/Respondent
Hearing dates: 30th April, 8th May 2009
JUDGMENT
Mr Justice Holroyde :
This is an appeal pursuant to reg 11 of the Costs in Criminal Cases (General) Regulations 1986 as amended (“the Regulations”) against the decision dated 22.07.08 of Costs Judge Master Campbell. It is linked to an application brought by the Appellant (“Mr Brewer”) against the Supreme Court Costs Office (“SCCO”) in the Administrative Court, which also relates to the decision of Master Campbell, and in which the present Respondent is at least informally an interested party. In accordance with paragraph XIII.4.4 of the Practice Direction (Criminal Proceedings: Costs) [2004] 1 WLR 2657, I have heard this appeal with the benefit of the assistance of assessors, Master Simons and Mr Simon Kenny. I give my judgment herein. I have also heard the application brought in the Administrative Court: I have given a separate judgment in relation to that application, the tenor of which will shortly become apparent.
It is necessary to begin by summarising as briefly as possible the long and somewhat complicated history which is relevant to both sets of proceedings.
On the 29th April 2001 Mr Brewer was served by the Serious Fraud Office, which was investigating suspected offences of dishonesty involving very large sums of money, with a notice pursuant to Criminal Justice Act 1987 s2 requiring him to produce documents. The matters with which the investigation was concerned included events in the USA, in relation to which there had been relevant civil proceedings in that country. Mr Brewer immediately contacted Miss Mercedes Travis, an American attorney who had acted for him in the proceedings in the USA and who was therefore very well acquainted with relevant matters there. She on his behalf contacted leading counsel in this country, and thereafter solicitors in London, Russell Jones & Walker (“RJW”).
On the 1st May 2001 Mr Brewer entered into an agreement with Miss Travis whereby he engaged her to act on his behalf with regard to all matters relating to the notice issued against him by the SFO, and any subsequent actions which may result from it. Under the terms of this engagement, Miss Travis agreed –
“… to work with you, your solicitors and should the same become necessary, your barristers in all regards in your defence including case preparation, attendance at conferences, evidence evaluations and review, research and other matters as required; I shall spend such time as is necessary to complete these duties; and, in the event it should become necessary, I shall perform such services through and including any ultimate trial or appeal that may result from the Notice.”
The fees payable to Miss Travis under that agreement were a flat fee of £15,000 per month, plus her out of pocket expenses. The fees (though not the expenses) were capped at £275,000, and in the event Miss Travis billed a total of £270,000 for her fees.
On the following day, 2nd May 2001, RJW agreed to act for Mr Brewer.
Mr Brewer was arrested in September 2001, and charged a year later in September 2002 – about 18 months after RJW and Miss Travis had each begun to work on the case. Within a few days of his being charged, a representation order was granted which covered the work of RJW, leading counsel and junior counsel. The work done by the English lawyers prior to that date was charged to Mr Brewer privately. For convenience, albeit imprecisely, I shall refer to the period prior to the granting of the representation order on 24.09.02 as “pre-certificate”, and the period thereafter as “post-certificate”.
On the 2nd November 2002 Mr Brewer married Miss Travis. For convenience, and following the course taken by counsel in their submissions to me, I will continue to refer to her in this judgment as “Miss Travis”.
On the 8th September 2003 the trial began against 5 defendants (including Mr Brewer, who was not first on the indictment), on charges alleging money laundering in relation to a sum of US $11.5 million. On the 19th December 2003 the trial was stopped by the trial judge, HH Judge Fingret, and all defendants were acquitted.
Counsel for the first defendant made a very brief application for a defendant’s costs order, offering to develop the application if the judge required. HH Judge Fingret indicated that a detailed application was unnecessary, saying “No, that will be the normal consequence”, and made “a defendant’s costs order to be taxed”. Counsel for Mr Brewer then said –
“Your Honour, I too have a similar application, both in respect of Mr Brewer’s out-of-pocket expenses after the grant of legal aid and also to cover a period of time prior to the grant of legal aid where other expenses were incurred”.
The judge replied: “I make a similar order in respect of that”. Counsel for each of the remaining Defendants then asked for, and were granted, “the same”.
RJW and counsel submitted their bills and fee notes, and their fees for both pre-certificate and post-certificate work were taxed and paid by the Determining Officer. It is relevant to note that RJW’s fees for all their work during both periods, including disbursements, amounted in the aggregate to £258,542.
On the 1st March 2004 Mr Brewer submitted his own claim for reimbursement of his expenses. For matters personal to himself he claimed a total of £54,897.37, comprising £17,241.86 for travel; £35,166.60 for copying; £1,403.94 for telephone calls; and £1,084.97 for sundries.
In addition to that claim in respect of personal expenses, Mr Brewer claimed reimbursement of fees and expenses which he had paid to Miss Travis in the total sum of £311,471.41.
On the 19th July 2004 the Determining Officer allowed Mr Brewer the total sum of £18,339.65, one-third of what had been claimed in respect of the personal expenses summarised in paragraph 13 above. He did not allow any sum in respect of the claim relating to payments to Miss Travis.
Mr Brewer applied for a redetermination pursuant to reg 9 of the Regulations, and on the 18th April 2005 the Determining Officer allowed a further £1,272.15 in respect of the personal expenses. He still did not allow any sum in respect of payments to Miss Travis. In response to a request from Mr Brewer, he gave written reasons on the 22nd June 2005.
By reg 10 of the Regulations, an appeal lay from that decision on redetermination to a Costs Judge. Mr Brewer gave notice of such an appeal, and on the 12th September 2005 it was heard by Costs Judge Master Rogers. He came to the conclusion that
“a small sum should be allowed to Mr Brewer in respect of, essentially, pre-prosecution work in which Mr Brewer’s case with RJW was materially assisted by the encyclopaedic knowledge of the case which Miss Travis was able to provide to them”.
He assessed that sum at £25,000.
On the 29th September 2005 Master Rogers gave written reasons for his decision. He was asked by Mr Brewer to certify points of principle of general importance pursuant to reg 11 of the Regulations, but declined to do so.
In the absence of any certified points of principle of general importance, Mr Brewer had no further avenue of appeal under the Regulations. However, he brought proceedings in the Divisional Court – R (Brewer) v Supreme Court Costs Office [2007] 1 Costs LR 20; [2006] EWHC Civ 1955 (Admin) - in which he successfully invoked the inherent jurisdiction of the High Court. That jurisdiction, recognised in the earlier case of R v Supreme Court Taxing Office ex parte John Singh & Co [1997] 1 Costs LR 49, is to be exercised sparingly to cure “a real injustice”. The Divisional Court held that Master Rogers, having accepted the claim in relation to Miss Travis’ fees in principle, should have (but had not) carried out a detailed investigation of what work she had done and whether it had been reasonably done in the circumstances of the criminal case. Maurice Kay LJ said, at para 27, that in his judgment –
“… there was a ‘real injustice’ in proceeding to assess the sum reflecting the input of Miss Travis without undertaking a detailed assessment of the work she had done”.
The court therefore quashed the determination made by Master Rogers on the 29th September 2005, quashed his decision refusing to certify a point of principle of general importance, and remitted the appeal to the Senior Costs Judge for further directions. Maurice Kay LJ, with whom Mitting J agreed, also made certain observations about the history of the case, and the practice which should be adopted in the future, to which I shall return.
That ruling of the Divisional Court was given on the 27th July 2006. The Senior Costs Judge subsequently gave directions assigning the matter to another Costs Judge so that the assessment of the sums payable to Mr Brewer could be revisited. So it was that the matter came to Master Campbell.
On the 8th December 2006 Master Campbell gave directions. He required various papers to be submitted to him by Mr Brewer, and that was duly done. Master Campbell considered the papers, and on the 29th May 2007 he gave a written decision.
Most unfortunately, there had been a misunderstanding or error as to whether a further oral hearing should take place before Master Campbell made his decision. A date for such an oral hearing had been identified when directions were given on the 8th December 2006, but that date came and went without any hearing having taken place. It appears that regrettably the date had not been confirmed to Mr Brewer or to his solicitors, with the result that they were waiting to hear from the court as to a new date, whilst Master Campbell proceeded in the belief that Mr Brewer and his advisers knew of the hearing date but did not wish to add oral submissions to their written submissions. This unhappy situation became apparent, of course, when Master Campbell’s written decision was received by Mr Brewer and his solicitors.
On the 28th June 2007 Mr Brewer asked Master Campbell to certify certain points of principle, including a point relating to the fact that he had made his decision without having heard oral submissions. On the 31st July 2007, Master Campbell recalled his decision of the 29th May. On the 26th September 2007 he conducted a hearing at which counsel then instructed on behalf of Mr Brewer was asked to consider 3 possible routes forward: a rehearing before Master Campbell; a rehearing before a different Costs Judge; or a request for Master Campbell to certify points of principle. On the 27th February 2008 Mr Brewer asked for the third of those courses to be adopted.
On the 22nd July 2008 Master Campbell reissued the decision which had initially been given on the 29th May 2007 but had then been recalled. He held in relation to the pre-certificate period that it would be inappropriate to allow Mr Brewer to recover costs on the flat-fee basis of £15,000 per month which Miss Travis had charged, without reference to the work actually done during each month. He therefore determined what seemed to him an appropriate notional hourly rate for a lawyer of Miss Travis’ experience and standing (bearing in mind that she was not then qualified as a solicitor in this country, though she is now), and then made an assessment of the work which he found to have been actually and reasonably done by her. By that process Master Campbell arrived at a total figure of £20,700, and awarded Mr Brewer that sum from Central Funds.
In relation to the post-certificate period, however, he held that Mr Brewer could not recover the fees and expenses he had paid to Miss Travis. His reasons, in summary, were –
The principle underlying reg 22 of the Criminal Defence Service (General) (No. 2) Regulations 2001 is that legally aided litigants should not be able to top up their public funding with their private resources;
The claim did not fall within the “small exception” to that principle provided for by reg 22(b) and recognised by the Court of Appeal in Goulden v Wilson Barca (a firm) [2000] 1 All ER 169, in particular because no application for prior authority had been made;
In any event, HH Judge Fingret had only awarded a defendant’s costs order in respect of out-of-pocket expenses, and the fees and expenses of Miss Travis did not fall within that category, but were rather the costs of “a second set of representation”;
Even if he were mistaken about reg 22, the claim “would still be defeated by the Practice Direction”, because a claimant is only entitled to recover his “expenses”, and paragraph I.3.1 of the Practice Direction (Criminal Proceedings:Costs) [2004] 1 WLR 2657 limits a publicly-funded claimant’s recovery to “his personal costs”: in his judgment, “expenses” and “personal costs” reimbursed a claimant for “out-of-pocket expenditure such as fares and subsistence”, not for “a second set of legal fees”.
On the same date, the 22nd July 2008, Master Campbell certified 2 points of principle of general importance, in the following terms:
“(A) Having regard to reg 22 of Part II Criminal Defence Service (General No 2) Regulations 2001 as amended on 18.2004 by SI 2004 No 1196 and the decisions of the Court of Appeal in R v Gittins [2007] EWCA Crim 807 and Wilson J in Goulden v Wilson Barca (a firm) [2001] 1 All ER 169, whether a claim for expenses in respect of professional services incurred after the date of a Representation Order are recoverable out of Central Funds by an applicant (being a person in whose favour a costs order has been made) either wholly or in part.
(B) Whether an order for costs made in favour of an applicant out of Central Funds for ‘out-of-pocket’ expenses, is limited to expenditure such as fares and subsistence or whether it covers professional expenses including a second set of representation costs”.
To complete the lengthy route by which this appeal comes before me, Mr Brewer on the 12th August 2008 gave notice of appeal against Mr Campbell’s redetermination. The jurisdiction of the High Court to hear that appeal arises because reg 11(1) permits such an appeal where the Costs Judge certifies “a point of principle of general importance”. By reg 11(7), the decision of the High Court judge is final. By reg 11(8), the High Court judge “shall have the same powers as … a costs judge under these Regulations, and may reverse, affirm or amend the decision appealed against or make such other order as he thinks fit”.
The Grounds of Appeal, in summary, were –
That Master Campbell had been wrong to base his decision on reg 22 of the 2001 Regulations, because that regulation relates to an assisted person’s solicitor or advocate whereas Mr Brewer claimed for payments made by himself, which were not received by his solicitor or advocate and to which his solicitor and advocate were not party.
That alternatively, if reg 22 was only being applied by analogy, Master Campbell should have regarded the payments made by Mr Brewer to Miss Travis as falling within the reg 22(b) exception, the circumstances being such that no application for prior approval was possible.
That Master Campbell was wrong to hold that the claim was “defeated” by the Practice Direction, since a Practice Direction has no legislative force.
That Master Campbell was wrong to regard the fees paid to Miss Travis as a second set of representation costs; and was wrong to hold that out-of-pocket expenses were limited to relatively minor expenses such as fares and subsistence, and could not extend to the fees of a professional person.
On the 15th October 2008 Mr Brewer issued a Part 8 claim against the SCCO in the Administrative Court invoking the inherent jurisdiction of the court to quash the decision of Master Campbell other than the certified points of principle. He did so on the basis that the statutory right of appeal under reg 11 of the Regulations is limited to the decision which is the subject of the certified points, which in the circumstances of this case means the assessment of costs in relation to the post-certificate period, and that accordingly he had no such statutory right of appeal in relation to his costs during the pre-certificate period.
On the 30th October 2008 the SCCO acknowledged service of this claim and indicated that it would not be resisted. It is agreed on all sides that the failure to conduct the oral hearing which Mr Brewer was expecting, and to which he was entitled, means that the decision of Master Campbell cannot stand. It is further agreed on all sides that the outcome of the Part 8 claim should be an order remitting the matter for another Costs Judge to make a fresh assessment of the sums payable to Mr Brewer. Not all the details of the appropriate order to be made in the Administrative Court were the subject of similar unanimity, but it is not necessary for me to say more about that in this judgment.
An application to hear that claim at the same time as this appeal was refused by me, for reasons which it is unnecessary to set out here, but I directed that the 2 hearings should take place one after the other. My judgment in the Administrative Court quashes the determination of Master Campbell save for the paragraphs therein dealing with the subject of the statutory appeal.
Given that there must be a rehearing before a different Costs Judge in relation to the costs in the pre-certificate period, Mr Brewer and the Secretary of State agree that there should be a similar outcome to this appeal so far as the costs of the post-certificate period are concerned. The Secretary of State submits that in those circumstances it is unnecessary for me to give any judgment in relation to the certified points of principle. Mr Brewer, in contrast, says it is important for those points of principle to be addressed by me before another Costs Judge embarks upon the necessary determination.
I turn to consider the legislative provisions relevant to this appeal, insofar as I have not already mentioned them in reciting the history of the proceedings.
The power of the Crown Court to make, in favour of a person acquitted after trial on indictment, an order for a payment to be made out of central funds in respect of his costs (a “defendant’s costs order”) is contained in s16(1) and (2) of the Prosecution of Offences Act 1985 (“the 1985 Act”).
By s16(6) of the 1985 Act –
“A defendant’s costs order shall, subject to the following provisions of this section, be for the payment out of central funds, to the person in whose favour the order is made, of such amount as the court considers reasonably sufficient to compensate him for any expenses properly incurred by him in the proceedings”.
By s16(7) –
“Where a court makes a defendant’s costs order but is of the opinion that there are circumstances which make it inappropriate that the person in whose favour the order is made should recover the full amount mentioned in subsection (6) above, the court shall -”
(a) assess what amount would, in its opinion, be just and reasonable; and
(b) specify that amount in the order”.
By s16(9) –
“Subject to subsection (7) above, the amount to be paid out of central funds in pursuance of a defendant’s costs order shall –
a) be specified in the order, in any case where the court considers it appropriate for the amount to be so specified and the person in whose favour the award is made agrees the amount; and
b) in any other case, be determined in accordance with the regulations made by the Lord Chancellor for the purposes of this section.”
The relevant regulations are of course the 1986 Regulations which I have already identified at the beginning of this judgment. Reg 7 of those Regulations must be quoted in full:
“(1) The appropriate authority shall consider the claim, any further particulars, information or documents submitted by the applicant under reg 6, and shall allow such costs in respect of –
a) such work as appears to it to have been actually and reasonably done; and
b) such disbursements as appear to it to have been actually and reasonably incurred,
as it considers reasonably sufficient to compensate the applicant for any expenses properly incurred by him in the proceedings.
(2) In determining costs under paragraph (1) the appropriate authority shall take into account all the relevant circumstances of the case including the nature, importance, complexity or difficulty of the work and time involved.
(3) When determining costs for the purposes of this regulation, there shall be allowed a reasonable amount in respect of all costs reasonably incurred and any doubts which the appropriate authority may have as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved against the applicant”.
In the form which they took at the time when the representation order was granted, and which is accordingly the form which I must apply, the Regulations did not define “expenses”. It may be noted that as a result of an amendment introduced with effect from the 13th October 2008 by the Costs in Criminal Cases (General) Regulations 2008 (SI 2008 No 2448), that word is now defined as meaning “out of pocket expenses, travelling expenses and subsistence allowance”.
Reg 22 of the Criminal Defence Service (General No 2) Regulations 2001, to which Master Campbell referred, provides that where a representation order has been made –
“… the assisted person’s solicitor or advocate whether acting under a representation order or otherwise shall not receive or be a party to the making of any payment for work done in connection with the proceedings in respect of which the representation order was made, except such payments as may be made …
b) in respect of any expense or fees incurred in (i) preparing, obtaining or considering any report, opinion or further evidence, whether provided by an expert witness or otherwise; or (ii) obtaining any recordings, where an application for an authority to incur such fees or expenses has been refused by the Costs Committee …”
In Goulden v Wilson Barca (a firm) Wilson J, with whom Morritt LJ agreed, referred to the general principle against topping up of public funding, and said at p174 that reg 22(b) was –
“… a small exception … imported into the funding of criminal proceedings by virtue of the paramount need for a defendant to such proceedings to suffer no constraint in seeking, if necessary even with his own funds, to assemble his evidence.”
Reg 22, to which Master Campbell referred in his first point of principle, does not in my judgment have any direct application to the present case: it is concerned with claims by solicitors or advocates, and at the material times Miss Travis was neither a solicitor or advocate in this country, nor instructed by one. Master Campbell himself recorded that RJW had at no time instructed Miss Travis to undertake any work on their behalf: indeed, as is apparent from a letter quoted in paragraph 3 of the judgment of Maurice Kay LJ in R (Brewer) v Supreme Court Costs Office, RJW at an early stage of proceedings had positively declined a request from Miss Travis to retain her as “part of the defence team”. For the same reason, the two cases mentioned by Master Campbell have no direct application to the claim in respect of the fees and expenses of Miss Travis. This much is common ground between the parties to this appeal. The Secretary of State therefore concedes that there was no breach of reg 22 of the 2001 Regulations, and does not seek to uphold that part of Master Campbell’s reasoning.
The Secretary of State does however seek to uphold Master Campbell’s decision insofar as it relates to his second point of principle.
In that regard, R v Bedlington Magistrates’ Court ex parte Wilkinson (unreported, 21.10.99: CO/0900/99) is an important case as to the meaning of the word “expenses” in s16 of the 1985 Act. In that case a defendant’s costs order was made in favour of Mr Wilkinson, who sought to be paid, at an hourly rate which he specified, for his own work in preparing his case for trial. He also made claims for reimbursement of the costs of “a specialist graphics contractor”, and of various other disbursements. The Divisional Court held that the appropriate authority had been correct to refuse the claim in respect of Mr Wilkinson’s own work because that was not a claim for “expenses”. The other heads of claim, however, were capable of being “expenses properly incurred”. Moses J, with whom Tuckey LJ agreed, said –
“The justices’ clerk appears to have taken the view that, because solicitors had been engaged, had acted for the applicant, and had put in their claim for costs, there was no warrant for the applicant to incur extra expenditure. Since the clerk gave the applicant no opportunity to challenge that view, it is not surprising, in my judgment, that he took too narrow a view about the matter. It does not follow that, because a solicitor has claimed costs and disbursements, that will necessarily rule out other expenses and disbursements having been incurred by the litigant himself. I would be prepared to go so far as to say it is likely to follow, but it does not necessarily follow. The justices’ clerk, particularly since he was warned that a further claim would come from the litigant himself, should have kept an open mind as to whether, on examination of those particular items claimed, those claims could be justified within the terms of the statute and the regulations. In failing to consider those claims on their merits in my judgment the justices’ clerk erred in law” [my emphasis].
That case, as the Divisional Court confirmed in R (Brewer) v Supreme Court Costs Office, is authority for the proposition that the fact that the person in whose favour a defendant’s costs order has been granted was represented by counsel and solicitors whose bills have been separately assessed, does not necessarily prevent a further claim by the applicant in respect of “expenses properly incurred”.
In my judgment, those decisions of the Divisional Court provide a clear answer to the first of the certified points of principle. As a matter of principle, in my judgment, a person in whose favour a defendant’s costs order has been made may be allowed costs reasonably sufficient to compensate him for expenses incurred by him in the proceedings in respect of professional services, even if (as I assume) the certified point is intended specifically to relate to cases in which the professional services are legal services. Whether such costs are in fact allowed will depend on whether in the circumstances of the particular case the applicant can bring himself within the statute and the regulations by showing that the expenses in question were properly incurred by him in the proceedings, and relate to work which had actually and reasonably been done and/or disbursements which had actually and reasonably been incurred. In determining whether an applicant has so succeeded, the determining officer must take into account all the relevant circumstances of the case, and must resolve against the applicant any doubts he may have as to whether the costs were reasonably incurred or were reasonable in amount.
As Moses J said in the passage I have cited, the fact that the lawyers instructed under the representation order have made their own claim for fees and disbursements does not necessarily rule out an applicant additionally being awarded sums to compensate him for expenses he has incurred; but that is likely to follow. It seems to me that the applicant’s claim is all the more likely to fail when the subject matter of it is expenses incurred by him or her during the currency of the representation order in respect of legal professional services (including in that phrase all services of the kind commonly provided by the solicitors and counsel instructed under a representation order). It must be borne in mind that solicitors acting under a representation order could in a proper case themselves engage and pay a person (including a lawyer) who, for reasons particular to the case, was in a position to provide particular assistance to the defendant’s case. Alternatively, the solicitors could instruct the other person to provide legal services and claim payment for those services as a disbursement; and in such a case the solicitors might think it appropriate to seek prior authority. That, in my view, would be the course one would expect to be adopted where, for example, a lawyer from another jurisdiction was required to provide assistance (whether amounting to expert evidence or not) with the law, practice or procedure of that jurisdiction; or where a lawyer engaged in linked or related proceedings (eg civil proceedings involving some or all of those concerned as defendants or witnesses in the criminal case) was required to assist with information about those proceedings. Where however the solicitors were instructed under the representation order at the relevant time, but played no part in engaging or instructing the person in respect of whose fees the claim is made, it will often, it seems to me, be very much harder in practice for the applicant to bring himself within the statute and regulations.
Because the task of the determining officer (or other appropriate authority under the Regulations) in every case is to determine the particular claim in accordance with the statute and the Regulations, and in doing so to take account of all relevant circumstances, I do not wish to say anything which may be regarded as fettering his performance of that task in any way. I hope however it may be helpful to suggest some of the circumstances which may be thought relevant in a case which involves a claim by a successful defendant for reimbursement from central funds of expenses incurred by him in relation to legal professional services during a period when a representation order was in force. In my view, the determining officer will wish amongst other circumstances to consider –
The profession, and professional qualifications, of the person who provided the relevant services, and the capacity in which he was acting at the time when he provided them. Often that will be obvious, but in some cases it may require careful consideration on an item-by-item basis.
The exact nature and purpose of the professional services provided. By way of illustration: expert evidence as to foreign law is likely to be outside the competence of the solicitors and counsel instructed under the representation order; but preparation of schedules and summaries will generally be well within their competence, and indeed will often be work suitable for fee-earners of a lower grade.
The reasons why it is said to have been necessary and reasonable to engage that person to provide those services, and to do so at the time when the services were provided.
The reasons why it is said such services could not be provided by the legal team instructed under the representation order, bearing in mind that the representation order is intended to provide the level of legal advice and representation appropriate to the specific case.
The reasons why the claim did not, by either of the possible routes I have mentioned or in any other way, form part of the solicitors’ claim for fees and disbursements under the representation order.
The basis on which, and the rate at which, the provider of the services charged the applicant.
The extent to which there is any duplication of, or overlap with, work also done by the lawyers instructed under the representation order.
What was said on the claimant’s behalf when the application for the defendant’s costs order was made in the criminal proceedings.
If the claimant’s application for reimbursement of his expenses is not made at the same time as the claim made by his lawyers under the representation order, the reason why that is so.
So far as the second certified point of principle is concerned, the submissions of the parties show that dictionary definitions of the phrase “out-of-pocket expenses” differ quite substantially. Mr Brewer points to some which focus on the payment being made with one’s own money, rather than being paid for by or charged to someone else; the Secretary of State points to others which limit the meaning to small amounts of money. Both counsel agree that in the end the dictionaries cannot provide a definitive answer. I cannot find any clear justification for limiting the phrase to expenses which are modest in amount. In R v Bedlington Magistrates’ Court ex parte Wilkinson the claim in respect of the graphics consultant was for a sum (in 1998) of just under £4,000. Nothing in the judgment of the Divisional Court suggests that the claim would be bound to fail on the grounds of quantum alone.
I have come to the conclusion that the expense of paying fees in respect of professional services is in principle capable of being an out-of-pocket expense. Although it does not arise in this case (because I am concerned in this appeal with the post-certificate costs), an illustration of the principle might be found in a payment for the services of a local solicitor engaged by a successful defendant in the very early stages of a police investigation, but subsequently replaced by solicitors with greater expertise in the relevant area of criminal law. I see no reason why the payments made to the first solicitor should not be described as an out-of-pocket expense. I do not think the meaning of the phrase can alter according to whether it relates to a pre-certificate or post-certificate period. It follows that, with all respect to Master Campbell’s experience in this field, he did in my judgment fall into error in limiting the recoverable expenses, on semantic grounds, to items such as fares and subsistence.
Thus use of the phrase “out-of-pocket expenses” does not of itself, in my view, alter the task which the determining officer must undertake. As I have indicated in my observations with regard to the first point of principle, his task is to consider whether the claimant has been able to bring a particular item of expense within the statute and the Regulations. Performance of that task provides, in my view, all appropriate protection for the public purse, particularly bearing in mind the Court of Appeal’s confirmation in R v Supreme Court taxing Office ex parte John Singh & Co that a determining officer, having gone through the individual items of a claim under a defendant’s costs order, is entitled then to stand back and consider whether the aggregation of those individual items produced an unreasonable result.
A number of points must nonetheless be made about the second certified point of principle.
First, as I have indicated, the phrase does now appear in the Regulations, though it did not do so in the Regulations at the time relevant to this appeal. There may therefore be cases in which a determining officer has to consider whether a particular claim does relate to something which can properly be described as an out-of-pocket expense.
Secondly, the words with which the second certified point of principle concludes need to be considered with a degree of caution. As I have said, I do not think an expense will be prevented from being an “out-of-pocket expense” solely on the grounds of quantum, or solely because it covers professional expenses. A claim for the expense of “a second set of representation costs” is however likely to be unsuccessful for a number of other reasons.
Thirdly, the point arises in the present appeal not because of the relevant wording of the Regulations, but because the phrase was used by Mr Brewer’s then counsel in making his application to HH Judge Fingret for a defendant’s costs order. Given the nature and extent of the claim made in relation to Miss Travis’ fees and expenses, and bearing in mind that the dictionary definitions do differ, it was not a helpful phrase. Submissions were made to me on the question of whether, by granting an application made in those terms, HH Judge Fingret intended in some way to limit the defendant’s costs order. I do not think it probable that he did intend to do so. Nor however do I think it at all likely that he was contemplating that the application which Mr Brewer would make to the determining officer would include fees for Miss Travis exceeding £300,000.
That brings me to a point which I regard as important not only in this case but also in other claims for a defendant’s costs order.
I begin by referring to what Maurice Kay LJ said at the conclusion of his judgment in R (Brewer) v Supreme Court Costs Office. In paragraphs 26 and 28 the learned Lord Justice made plain that the problems in the case had arisen because RJW’s claim, and Mr Brewer’s claim, were submitted separately and remained separate throughout the taxation process. I respectfully agree. The determining officer and Costs Judges involved so far, and the Costs Judge who must now take on afresh the assessment of Mr Brewer’s claim, have been and will be handicapped by the difficulty of, for example, determining the extent to which Miss Travis’ work may have overlapped with work done by RJW (though it is right to record that any such overlap is denied by Mr Brewer). I also respectfully agree with, and think it right to repeat, what Maurice Kay LJ said about the need (pending any Practice Direction or amendment of the Regulations) for practitioners to avoid repetition of what has happened in this case:
“Practitioners should ensure that, where separate and to some extent conflicting claims are to be presented, they should be presented together in a manner which makes clear the relationship between them”.
The position which has emerged in the course of the present appeal makes it appropriate in my view for me to add something to what Maurice Kay LJ said. It relates to what should happen when the application for a defendant’s costs order is made, in other words at an earlier stage than that to which Maurice Kay LJ was referring.
The brevity of the applications for, and grant of, the several defendants’ costs orders at the conclusion of the trial before HH Judge Fingret reflected what is common practice in many cases. In part, brevity is often appropriate and proper because the making of such on order is likely to be the obvious and correct course, so that detailed submissions are unnecessary; and the fact that there is to be detailed consideration of the claim by the determining officer often makes it quite unnecessary to go into any particulars of the quantum of the claim. In part, however, the common brevity of such applications and of the granting of the orders is referable to what is the common reality of such orders: namely, that the vast majority of the overall cost of the defence case will be covered by the representation order (which is by statute excluded from the scope of the defendant’s costs order: see s21(4A) of the 1985 Act), and that the defendant’s costs order will only relate to modest expenditure such as the defendant’s travel to court and subsistence.
But the circumstances of this case illustrate the danger of that common practice if nothing is done to alert the trial judge to an unusual or exceptional case. I make clear that I intend no criticism of counsel then appearing for Mr Brewer, because I do not know what his instructions were and it may very well be that he was unaware of the nature and quantum of the claim which was to be made in relation to Miss Travis’ fees. I think it very probable, however, that the brief terms in which his application was made would have been taken by the judge to mean that no very substantial amount was in issue, and that no particular inquiry was necessary on his part before he granted the application. I cannot think that HH Judge Fingret would have responded as briefly as he did if he had known that a claim against the public purse for more than £300,000 was going to be made. I do not say that he would necessarily have refused the application, and it is for that reason that I do not think it right to treat his order as being limited in its intent.
The wider importance of this lies in the powers of the trial judge – who is the person best placed to assess such matters – to limit in some way the costs which would or might otherwise be payable from the public purse. The trial judge at the end of the trial is better placed than a determining officer weeks or months later to decide, for example, whether the trial was unnecessarily lengthened or the defence costs unnecessarily increased by the successful defendant’s pursuit of irrelevant or obviously-inadmissible points. Under s16(6) of the 1985 Act, the judge can only make a defendant’s costs order in respect of expenses “properly incurred” by the defendant in the proceedings. If therefore he is clearly of the view that a particular category of the overall costs was not properly incurred, and subject of course to his hearing submissions on the point, he must exclude them from his order or direct the determining officer to disallow them. Alternatively, if he feels that certain costs may not have been properly incurred, he can direct the determining officer to investigate those items: see para V.1.1 and V.1.2 of the Practice Direction. Under s16(7) of the 1985 Act, he has the power in an appropriate case to specify an amount less than the full amount of the expenses. But if he has no real idea of what is going to be claimed, he is in no position to consider whether, let alone how, to exercise any of those powers. That, as it seems to me, was the situation of HH Judge Fingret.
Moreover, if the judge has not had any basis even for considering whether he should exercise his powers in this regard, the fact that the determining officer is entitled to consult the trial judge is of little relevance. If there is nothing to suggest that the trial judge would wish to make comments about a particular category of costs, there may well be no reason for the determining officer to make any enquiry.
It would therefore be appropriate, in my opinion, for advocates applying for a defendant’s costs order to indicate at least the heads of claim which will or may be made, and if possible to give a very rough indication of the expected quantum. In many cases, experience suggests that a very few words will suffice (“defendant’s travel and subsistence”; “costs of engaging a photographer to take the pictures which were shown to the jury”; “unlikely to exceed £250”; etc). But if a substantial and/or unusual claim is anticipated, the judge should in my view be alerted to it by at least an outline indication. In that way, the judge will have the opportunity to consider his powers under s16(6) and s16(7), and the risk of two claims being made and considered separately will be significantly reduced.
To return to the specific circumstances of the present case. Given the differing definitions of the phrase “out-of-pocket expenses”, I do not think it would be just to assume that counsel used it, or HH Judge Fingret understood it, as a limitation of the claim to modest incidental expenses. Notwithstanding the observations above as to what ought in my view to be the practice, I cannot think it would be right in the circumstances of this case for Mr Brewer’s claim in respect of the fees of Miss Travis to be defeated or substantially reduced solely on the basis of an assumption as to how that phrase was used and understood in a brief exchange in the Crown Court.
In my judgment, the out-of-pocket expenses which may be awarded from central funds pursuant to a defendant’s costs order may in principle be substantial in quantum and/or relate to professional expenses, and are not necessarily limited in the way Master Campbell thought. Everything again depends in practice on whether in the circumstances of the particular case an applicant – in this case, Mr Brewer - can bring himself within the statute and the Regulations by showing that the expenses in question were properly incurred by him in the proceedings, and relate to work which had actually and reasonably been done and/or disbursements which had actually and reasonably been incurred.
In the light of what I have said above about the two certified points of principle, it will be apparent that, with all respect to Master Campbell, I consider he misdirected himself about the meaning of the Act and the Regulations, and wrongly felt himself bound in law to reject certain aspects of Mr Brewer’s claim. For that reason, and having regard also to the realities of the position in view of the quashing of other parts of Master Campbell’s order, it is in my view clear that this appeal must be allowed and the whole of Mr Brewer’s claim in relation to the fees and expenses of Miss Travis remitted to be considered afresh by a different Costs Judge. I decline to direct that it must be the Senior Costs Judge himself who conducts that fresh assessment: it shall be done by him or by another Costs Judge chosen by him. It will be a matter entirely for the Costs Judge who is so selected to determine the application in accordance with the statute and the Regulations. I conclude by respectfully repeating and adopting one final passage from the judgment of Maurice Kay LJ in R (Brewer) v Supreme Court Costs Office:
“I express no view whatsoever on what a proper reassessment may yield. I am certainly not suggesting that it is likely to yield a sum approaching the one claimed”.
My order on this appeal is as follows:
The appeal of Mr Brewer is allowed, and the decision of Master Campbell in paragraphs 102 – 116 of his Reasons for Decision is set aside.
The appeal shall be remitted to the Senior Costs Judge for him –
to nominate either himself or another Costs Judge to determine afresh the costs payable to Mr Brewer pursuant to the defendant’s costs order granted to him by HH Judge Fingret on 19.12.03;
to give notice of such fresh determination to the Lord Chancellor, so that the Lord Chancellor may arrange for written or oral representations to be made on his behalf; and
to give any further directions he considers necessary for the hearing of that determination.
So far as costs are concerned, I have heard submissions of principle in this regard, and my attention has been drawn to certain correspondence written without prejudice save as to costs. The Secretary of State submits that Mr Brewer has acted unreasonably in his conduct of this appeal and his application to the Administrative Court, and has thereby put the parties to unnecessary expense, because it would have been possible to agree that the matter must be remitted for the costs recoverable under the defendant’s costs order to be determined afresh. On behalf of Mr Brewer it is submitted that the key question is whether, against the background of the long and in many respects unsatisfactory history of this matter, he can be said to have acted unreasonably in deciding to take the course he did. I agree that that is the issue, and my answer is that in all the circumstances Mr Brewer did not act unreasonably: in my view, given that the Secretary of State was supporting Master Campbell’s interpretation of “out-of-pocket expenses”, it was not unreasonable to seek to resolve the questions of law before incurring the expense of what is likely to be a lengthy fresh determination. The fact that the issues on this appeal were narrowed down to one may be relevant to the quantum of costs, but does not in my view mean that Mr Brewer should be denied his costs altogether.
I therefore take the view that Mr Brewer is entitled to the costs of this appeal, and that in principle his costs of the earlier stages of this matter will fall to be considered and determined by the Costs Judge who is appointed to conduct the fresh determination. As was contemplated at the conclusion of the hearing, I await the further submissions of counsel, in the light of this judgment and of my order, as to the form of the order for costs and as to the summary assessment thereof.