The Lord Chancellor v Alexander Johnson & Co Solicitors & Anor

The principal issue arising on these appeals is whether the respondents, a firm of solicitors and a barrister, are in respect of acting on behalf of Aaron Phillips in certain criminal proceedings entitled to fees payable under the Litigators’ Graduated Fee Scheme (GFS) or under the Very High Costs Cases (VHCC) scheme. The issue involves a point of interpretation of the Criminal Defence Services (Funding) Order 2007 as amended.

One presumes that each such scheme was designed to provide fair and proper remuneration for litigators and advocates acting in such cases. It is quite extraordinary that, according to the Costs Judge in the court below, the solicitors had calculated that the potential difference in their fee – depending on which scheme applied – could itself be in the region of as much as £270,000. At all events the outcome of this appeal matters, and matters very much, to each side.

There is a second issue. That issue is, if the GFS does apply, whether the respondents are entitled to be remunerated on the footing of there having been a “cracked trial” or on the footing of there having been a plea of guilty at a Plea and Case Management Hearing (PCMH).

The appellant Lord Chancellor was represented before me by Mr Ben Watson. The respondent solicitors, Alexander Johnson, were represented by Mr Paul Lewis QC appearing with Mr Martin McCarthy. The respondent barrister, Mr Martin McCarthy, also appeared on his own behalf as second respondent: he adopted Mr Lewis’ arguments. It was common ground that for present purposes the position of the respondents is the same.

On 3^rd April 2009 a representation order was granted naming a firm of solicitors called Brady Eastwood Pearce Stuart to act on behalf of Aaron Phillips. He had been charged with robbery of a jeweller’s shop in Guildford on 31^st March 2009. It was subsequently alleged that this robbery was part of a large conspiracy to rob jewellery stores in the south of England in 2008 and 2009. A further indictment including a count of conspiracy, as well as other counts of robbery, was then preferred. There were 37 counts and 28 defendants. A second representation order was granted in favour of Mr Phillips on 23^rd September 2009, naming the same solicitors.

On the 16^th November 2009 representation was transferred to the respondent solicitors, Alexander Johnson, the representation order being amended accordingly. They instructed as counsel Mr McCarthy. The Costs Judge made no finding as to whether or not the transfer of representation was prompted by an appreciation that the matter was likely to be classified as a VHCC.

It was mooted, with the approval of HHJ Southwell, that the matter be divided into four separate trials. Mr Phillips was to be prosecuted in two of such trials. There were at least three hearings before the judge. In due course a hearing, designated in the cause list at Kingston Crown Court as a PCMH, was fixed for 30^th November and 1^st December 2009, to deal with all four proposed cases.

On that occasion, various directions were given by HHJ Southwell. But there was no arraignment of any of the defendants, some of whom in fact had given notice of their intention to apply to have the proceedings dismissed against them. The judge, who had directed that the matters be divided into four trials, also set the trial dates, trial 1 being fixed for 12^th April 2010 with a time estimate of seven weeks and the other three trials being fixed for various sequential dates in 2010, each also with a time estimate of seven weeks. As noted in the court log, the “PCMH” (as it was described) was then “adjourned” to the 21^st and 22^nd January 2010 before HHJ Southwell. The judge is recorded as indicating that full credit for pleas would be available until then and that he would expect arraignment on that date.

A note of prosecuting counsel prepared for that first hearing records that if any defence counsel “in advance of the PCMH” wished to make representations then prosecuting counsel would be available for a round-table conference on 11^th and 12^th January 2010.

In the meantime, because of the size of the cases, various of the instructed firms of solicitors had given notification to the Legal Services Commission (LSC) that the case might be appropriate to be designated as a VHCC. The first such notification was on 21^st September 2009. On the 2^nd December 2009 the LSC was told that the matter had been ordered to be split into four separate trials each lasting seven weeks. (It seems, too, that the documentation ran to many tens of thousands of pages, including mobile phone records).

On the 15^th December 2009 the LSC decided that each case should be classified as a VHCC. Solicitors for the various defendants were notified accordingly. There was some muddle and the letter of notification of that classification was not sent out to Alexander Johnson themselves until 4^th January 2010 (although they had by then heard about it).

On 7^th January 2010 Alexander Johnson responded, indicating that Mr Phillips was likely to plead guilty and refusing “to enter into a VHCC contract”, as they put it. The LSC replied, maintaining the classification and stating that Alexander Johnson could claim payment for “all work reasonably done up to the point of case classification, subject to its reasonableness”.

The four cases duly came before HHJ Southwell again on 21^st and 22^nd January 2010 at Kingston Crown Court. They were again listed as PCMHs. On that occasion, most of the defendants were arraigned and a number of them, including, as foreshadowed, Mr Phillips, pleaded guilty to various counts, the prosecution indicating that it would not pursue the other counts against Mr Phillips. (There was a subsequent variation to the indictment and plea in April 2010 to deal with a technicality but it is agreed nothing turns on that). Various other directions were given with regard to the other cases. Mr Phillips continued to be represented at that hearing and thereafter by Alexander Johnson and Mr McCarthy, they considering themselves now to be acting pro bono.

On 26^th January 2010 the LSC wrote again to Alexander Johnson saying they had reviewed matters but maintaining the VHCC classification. On 27^th January 2010, Alexander Johnson wrote back, requesting reconsideration on the basis of “exceptional circumstances”. It was observed by Alexander Johnson that by the time of the LSC’s letter of 4^th January 2010 virtually all the work on behalf of Mr Phillips had been done and that in substance the case against him was concluded save for sentence. The letter indicated that the firm was well aware of the great difference in fees payable and in fact had prepared its forthcoming business plan on the basis that it would be paid under the GFS. Indeed telephone calls between the LSC and the firm at the time indicated what a shattering blow it would be to the firm (not a large practice) if their remuneration was solely on a VHCC basis. The classification, however, continued to be maintained.

For his part, Mr McCarthy put in two claims under the GFS on 26^th January 2010.

On 29^th January 2010 Alexander Johnson wrote to the Crown Court asking for the representation orders to be withdrawn. That request was refused on the papers by a judge. There was then a hearing before HHJ Southwell himself and on 5^th March 2010 he directed that the order granting representation – plainly intending to cover both representation orders - be withdrawn. There is a transcript of the relevant part of that hearing. Mr McCarthy made clear that, if there was revocation, Mr Phillips would continue to be represented on a pro bono basis by him and Alexander Johnson. Mr McCarthy referred to there being two options: to revoke the representation or to transfer it (“or what part of it remains”). HHJ Southwell adopted the former course.

Mr Watson before me expressed unhappiness at this order. He said that it was not appropriately made, given the circumstances, under Regulation 17 of the Criminal Defence Service (General) (No. 2) Regulations 2001. But, on my query, he expressly accepted that the judge had jurisdiction to make the order and that it could not be regarded as a nullity. I add that HHJ Southwell would have been well familiar with the Regulations: and, further, that Mr McCarthy had put the matter entirely even-handedly before the judge.

There was further correspondence. On 21^st May 2010 Alexander Johnson put in a claim for fees under the GFS. In due course they, and Mr McCarthy, were informed that they could not claim under the GFS but only under the VHCC scheme. Appeals were made by each on 20^th July 2010, and lengthy written submissions were filed on each side. The LSC, however, chose not to be represented at the actual hearing.

In careful and thorough decisions dated 9^th March 2011, Costs Judge Simons upheld the appeals of Alexander Johnson and Mr McCarthy. He ruled that they were entitled to be remunerated under the GFS, not the VHCC scheme. He further ruled that they were entitled to be remunerated on the basis that there had been a “cracked trial”. Various other matters he remitted to the LSC for further consideration: it is agreed that I am not concerned with those.

Against those decisions the Lord Chancellor in turn now appeals, by appeal notices dated 1^st April 2011, pursuant to Article 31 (5) of the Criminal Defence Service (Funding) Order 2007.

I should add that Alexander Johnson have been aggrieved by the delayed decision of the LSC on classification, notwithstanding the initial notifications to the LSC in September 2009: and consider that the decision of the LSC in their case may have been prompted solely by a desire to save money, in circumstances where, it is said, it was by then known that a plea was imminent. That has been refuted by the LSC, which has also explained why lengthy consideration was needed before the classification decision was made. For its part, the LSC considers that Alexander Johnson have, in declining to act on the case as a VHCC and in ultimately procuring the withdrawal of the representation order, engaged in manoeuvres in order to try and be paid under the GFS. In my view these competing positions do not have any bearing on the proper outcome here.

Every firm of solicitors who wish to act in VHCCs must be a panel member. To that end, from January 2008, they have been required to enter into the Very High Cost Case (Crime) Panel Contract for Panel Members. The previous scheme involving individually negotiated case contracts was superceded.

That contract (in its then form) is very lengthy. It is not necessary to set out its terms extensively here. It is made clear that its terms prevail over the General Criminal Contract; and that all VHCCs will operate under its terms. No limit is set on the number of VHCCs that Panel Members may accept. Members are required by paragraph 8 to give notification of a case which is, or is likely to be, a VHCC (a matter in any event also required under other statutory regulations). Paragraph 9.5 is in these terms:

“Once the CCU has decided that the notified case is a VHCC, and confirmed this in the Contract Decision Letter, this letter is sufficient for the Panel Member (and any Panel Advocates instructed by that Panel Member) to be able to conduct the case as a VHCC in accordance with the terms of this Contract. Once the Contract Decision Letter has been issued, the Contract terms apply to any VHCC Work conducted on the VHCC. There is no separate document to sign for every new VHCC.”

“VHCC work” is defined in paragraph 1 as meaning criminal defence work conducted for clients on VHCCs according to the terms of the contract.

Paragraph 17 deals with the question of accepting instructions to act privately where a case has been classified as a VHCC. Paragraph 22.3 is in these terms:

“For the avoidance of doubt, notwithstanding any delay by us in confirming that a case is a VHCC or in agreeing to the relevant Case Plan, Task List or any other document or fact requiring our confirmation, the Panel Member shall be entitled to payment for all VHCC Work from the date of the Representation Order, in accordance with the provisions set out in Annex 4.”

That thus makes clear that the classification of a case as a VHCC has, in terms of payment, a retrospective effect, as it were, as from the date of the Representation Order, and notwithstanding any intervening delay.

Alexander Johnson at all relevant times have been a VHCC panel member. At some stages in his argument, Mr Watson seemed to be suggesting that Alexander Johnson, as a panel member party to this VHCC panel contract, were positively obliged to continue to act for Mr Phillips on a VHCC basis after the matter was classified as a VHCC. But the contract does not so stipulate: indeed, as Mr Lewis pointed out, paragraph 9.5 by its wording, enables the panel member to conduct the case as a VHCC: it does not oblige it to do so. (That is also consistent with other provisions of the contract). The terms are to apply, under paragraph 9.5, to “any VHCC work conducted on the VHCC”. Mr Watson at all events ultimately disclaimed any proposition that Alexander Johnson were positively obliged to continue to act for Mr Phillips on a VHCC basis after 4^th January 2010.

It may be noted that while panel members for VHCC cases will in practice also be engaged in criminally legally aided work under the General Criminal Contract, by no means all firms of solicitors engaged in criminal legally aided work will be panel members able to undertake VHCC cases. The General Criminal Contract in this respect mirrors the VHCC Panel Members Contract in stipulating (among other things) that no further work may be carried out under the General Criminal Contract on a case notified as a VHCC.

The original Criminal Defence Service (Funding) Order 2007 contained no provisions relevant to the present issue. Such provisions first came in under the Criminal Defence Service (Funding) Amendment Order 2007 (the 2007 Funding (Amendment) Order). That was made under the enabling provisions contained in the Access to Justice Act 1999 and came into force on 14^th January 2008.

Article 3 provides that it applies to representation orders and proceedings classified as VHCCs after 14^th January 2008 (Article 4 then describing what is to be a VHCC). In addition, by Article 8 a new amending Article 3 (6A) is inserted into the original Order with effect from 14^th January 2008. That provides:

“This Order does not apply to a Very High Costs Case”

Article 26 goes on to provide for a new Schedule 2, headed “Litigators’ Graduated Fee Scheme”, to the original Order. Part 2 of Schedule 2 is headed “Graduated Fees for Guilty Pleas, Cracked Trials and Trials”. For the purposes of deciding the principal issue on this appeal, paragraph 10 of Schedule 2 is of prime importance. That paragraph is headed “Retrials and Transfers”. The relevant provisions are these:

“…(2) Where-

(a)

a case is transferred to a new litigator; or

(b)

a retrial is ordered and a new litigator acts for the assisted person at the retrial;

the original litigator and the new litigator must receive a percentage of the total fee, in accordance with the table following sub-paragraph (6), as appropriate to the circumstances and timing of the retrial, transfer or withdrawal of the representation order.

(3)

Where a representation order is withdrawn before the case ends, a litigator must receive a percentage of the total fee, in accordance with the table following sub-paragraph (6), as appropriate to the circumstances and timing of a transfer.

…

(5)

Where a case becomes a Very High Cost Case after a representation order has been granted and is transferred from the litigator named on the representation order to a new litigator–

(a)

the original litigator will be remunerated in accordance with the table following this paragraph; and

(b)

the new litigator will be remunerated in accordance with the individual contract which applies to the case.

(6)

Where a case becomes a Very High Cost Case after a representation order has been granted and the representation order is withdrawn before the end of the case, the litigator will be remunerated in accordance with the table following this paragraph as appropriate to the circumstances and timing of the withdrawal.

…”

The Explanatory Note (which is not part of the Order) to the 2007 Funding (Amendment) Order states that the payment provisions for proceedings in the Crown Court are being replaced with “a new fee scheme”. The Note also states:

“It also removes reference to Very High Cost Case [sic] which on or after that date will be remunerated in accordance with contractual arrangements entered into with the Legal Services Commission.”

On 11^th January 2008 the Criminal Defence Service (Very High Cost Cases) Regulations 2008 were implemented further to achieve that objective.

Then, with effect from 3^rd August 2009, the 2007 Funding (Amendment) Order was itself further amended. A Funding Order Changes: Information and Guidance document was released by the Ministry of Justice at that time. So far as VHCCs were concerned the Guidance document, among other things, explained that “some anomalies in relation to VHCCs have been addressed”. As far as paragraph 10 of Schedule 2 is concerned, paragraph 10 (3) was left unaltered. Paragraph 10 (5) was amended, however, and now read as follows:

“(5)

Where a case becomes a Very High Cost Case after a representation order has been granted and is transferred from the litigator named on the representation order to a new litigator–

(a)

the original litigator will be remunerated [at the same rates as those set out in Annex 7 to the Very High Cost Case contract]; and

(b)

the new litigator will be remunerated in accordance with [that contract]”

Paragraph 10 (6), it is to be observed, is in the relevant respects left unaltered.

Various other sub-paragraphs of paragraph 10 were added to or modified but not in a way suggested in argument to be material to what I have to decide. For completeness, it may be added that that version of the 2007 Funding (Amendment) Order held sway until April 5^th 2010 when there were yet further amendments. Paragraphs 10 (3), (5) and (6) of the previous version, however, were not further amended in any relevant respect.

It may be noted that in the present case the first representation order was made on 3^rd April 2009 (before the amendments to the 2007 Funding (Amendment) Order came into effect from 3^rd August 2009). The second was made on 23^rd September 2009 (after they came into effect). The Costs Judge below made no finding as to any implications of that – the point not having previously been considered by the LSC – and the parties before me agreed that it was not material for what I was being asked to decide.

The argument of the respondents, as forcefully and concisely developed by Mr Lewis, had the great attraction of being simple and straightforward. It is submitted that the terms of paragraph 10 (6) are clear and unambiguous, and should be read in accordance with their literal meaning. Doing that, those terms apply precisely, it is submitted, to the present situation. Here the case had become a VHCC after a representation order had been granted; here the representation order had been withdrawn before the end of the case; accordingly the litigator was to be remunerated in accordance with the table following that paragraph (i.e. under the GFS) as appropriate to the circumstances and timing of withdrawal. Further, it is noted that when paragraph 10 (5), dealing with transfers of representation orders after a case became a VHCC, was amended with effect from 3^rd August 2009 it in terms provided that both the original litigator and the new litigator would be remunerated at VHCC rates: but no such amendment was made to paragraph 10 (6), dealing with withdrawal of representation orders after a case had become a VHCC. It was further submitted that there was no justification for writing in new words or glossing the words actually used; and if Parliament did not like the result then further amendment was needed. That was the essence of the argument and it was in substance the argument that persuaded Costs Judge Simons.

For the appellant Lord Chancellor, Mr Watson submitted as follows:

Moving on from that, Mr Watson said that it is important to bear in mind throughout that the 2007 Funding Order in terms does not apply to VHCCs: see Article 3 (6A). Accordingly the Order is designed to apply, and only to apply, to General Criminal Contract cases and so applies the GFS. Given that context, paragraph 10 of Schedule 2 is not designed to apply to circumstances covered by the VHCC regime: in particular, paragraph 10 (5) and paragraph 10 (6) are to be read conjunctively, as being designed to cater for those who are not panel members but for whom provision is required where a case becomes a VHCC (and so the firm, as a non-panel member, can no longer continue to act under the representation order) and the representation order is then transferred to a firm which is a panel member (covered by paragraph 10 (5)); or where a case becomes a VHCC (and so the firm, as a non-panel member, can no longer continue to act under the representation order) and the order is then withdrawn (covered by paragraph 10 (6)). Examples of the latter situation, it is said, would be where the client then elects privately to fund the original non-panel firm or where the firm then agrees to act pro bono. It is said that to read paragraph 10 in any other way would be wholly contrary to the entire legislative scheme, which distinguishes between VHCCs and General Criminal Contract cases.

Mr Watson further submitted that, if the respondents’ literal approach were correct, then paragraph 10 (3) would apply across the board (which could not, he said, have been the intention), and further would render paragraph 10 (6) otiose; whereas on the appellant’s interpretation paragraph 10 (6) has a purpose in expressly covering the position of a litigator who is not a panel member where the representation order is withdrawn by reason of the case becoming a VHCC. He yet further submitted that the subsequent amendment to paragraph 10 (5) with effect from 3^rd August 2009 had no bearing on, and did not call for corresponding amendment to, paragraph 10 (6): since on withdrawal the representation order ceased to subsist whereas on transfer it continued to subsist. It is, he submitted, clear from the amendment to paragraph 10 (5) that Parliament had, on reconsideration, decided that one costs assessment regime, applicable to both original litigator and new litigator, was appropriate in such a transfer situation – as well, no doubt, as being liable generally to be cheaper.

As the argument wore on, I became increasingly doubtful if the literal approach advanced by the respondents could, notwithstanding its prima facie attraction, be right.

I should say something about my own overall approach. It has, I gather, become notorious in this area generally that applicable legal aid provisions can give rise to swings and roundabouts: in some cases, litigators may end up being (objectively) over generously remunerated; in other cases they may end up being unreasonably parsimoniously remunerated. It has further been said that if the wording of Legal Aid regulations is clear and unambiguous there is no underlying equity available to a court to go against them. However, I do not think there is any general approach inevitably requiring Legal Aid Regulations such as these to be read, and only read, literally. Of course the court tries to give ordinary effect to the meaning of the words actually used. But if a strictly literal reading gives rise to an interpretation which has surprising consequences or is unlikely to reflect what Parliament was likely (objectively viewed) to have intended then it is legitimate to see if the words used can be properly read so as to give rise to a result likely (objectively speaking) to have been intended: that is, to adopt a purposive approach. But what cannot be done is to distort the words used: after all, it is ultimately from the words used that Parliament’s intention is to be derived.

The Lord Chancellor sought to place before me a witness statement of Mr Carter of 8^th April 2011 (that is, made after the decision of Costs Judge Simons). Mr Carter had been involved in the drafting of the 2007 Funding (Amendment) Order and he sought to explain the intention behind its provisions and the amendments. With respect, that is not legitimate and the witness statement is inadmissible for that purpose. The objections to permitting the adducing of evidence subjectively to explain the intention of a statute – and a statutory instrument can be no different – are legion and well-known (even in the context of interpreting an Act of Parliament scope for reference to Hansard is limited) and do not need further setting out here. The words of Lord Halsbury in Hilder v Dexter [1902] AC 474 at page 477 can also be usefully remembered:

“…in construing a statute I believe the worst person to construe it is the person who is responsible for its drafting. He is very much disposed to confuse what he intended to do with the effect of the language which in fact has been employed…”

(Similarly, and notwithstanding a rather more flexible approach is available, an objective approach still is required for construing commercial contracts: see Chartbrook Limited v Persimmon Homes Limited [2009] UKHL 38; [2009] 4 All ER 677.)

All that said, the difficulties in applying a literal approach to paragraph 10 (6) seem to me, on consideration, to be formidable.

I think that Mr Watson’s starting three principles are essentially correct and are borne out by the legislative scheme contained in the various Orders and in the VHCC Panel Contract and the General Criminal Contract. It is true that paragraph 10 (5), as amended with effect from 3^rd August 2009, does sanction the payment to an original litigator, who is not a panel member, of fees assessed on the VHCC basis. To that extent, the two schemes are not strictly entirely exclusive. But the rationale for that, as I have said, can be seen in a desire for consistency and convenience in assessing costs on the same basis in the one set of proceedings. Moreover, such a provision has retrospective effect so far as a non-panel member is concerned: and as for panel members, they are already on notice of that risk, by reason of paragraph 22.3 of the VHCC Panel Contract. (I should, however, mention that Mr Watson informed me in argument, and my assessors – whose assistance to me generally I would like to acknowledge - have confirmed, that it is not invariably the case that fees payable under the VHCC scheme are always less than under the GFS).

It seems to me that, given that the two schemes are designed to be distinct, and given that Article 3 (6A) as inserted by the 2007 Funding (Amendment) Order is explicit that the Order does not apply to VHCCs, one would not expect a VHCC panel member to be paid on a GFS basis once a representation order is withdrawn after a case has been classified as a VHCC. After all, if a representation order is transferred, after a case becomes a VHCC, the panel member to whom it is transferred only ever gets paid under a VHCC. One would not expect a differing result, after a case has become a VHCC, in the case of withdrawal (even accepting, of course, that withdrawal is different from transfer). The fact that in the present case, as Mr Lewis stressed, Alexander Johnson stated that they did not act after 4^th January 2010 for Mr Phillips on a VHCC basis has, in my view, no real bearing on the interpretative approach to be adopted and it would, I consider, give rise to an anomaly if such a matter could affect the outcome.

The difficulty in adopting a literal approach to paragraph 10 (6) without regard to context is illustrated by examples. Mr Watson’s example of a representation order being withdrawn if the defendant chooses to pay privately is one such example even if it is not a very likely scenario in practice: albeit it may be noted that it is a situation expressly contemplated in paragraph 17 of the VHCC Panel Contract. Other examples given by Mr Watson (he fearing the opening of floodgates if Mr Lewis’ arguments were accepted) were also rather unlikely – albeit not to be ruled out – connoting as they did seemingly unprofessional conduct on the part of litigators at the expense of their clients and the unquestioning preparedness of the court to sanction such withdrawal. But an altogether more likely example, and one which undoubtedly can occur in practice, is where a client chooses, at some stage after a case has been classified as a VHCC, to withdraw instructions from his solicitors and counsel and to act in person. In such circumstances, the representation order may well be withdrawn. On a literal interpretation of paragraph 10 (6), if, for example, a panel member has acted on a case classified as a VHCC case, after a representation order has been granted, for many months and then has his instructions (and representation order) withdrawn at, say, a very late stage during trial he would be entitled, on the literal interpretation of paragraph 10 (6) advanced, to be paid on a GFS basis. When that example was put to Mr Lewis in argument, he indeed accepted that was so. It is, however, most difficult to think that (objectively speaking) such a result could ever have been intended, running counter, as it does, to the whole differential schemes applicable to VHCCs and General Criminal Contract cases.

Moreover, if the literal approach to paragraph 10 were correct it is difficult to see what the purpose of paragraph 10 (6) is given the provisions of paragraph 10 (3). I should add that, for like reasons, it is in my view not possible for the respondents here to claim fees on a GFS basis by reference to paragraph 10 (3) alone: indeed Mr Lewis did not seek so to argue.

It seems to me, in fact, that the outcome here is not so much to be decided by the application of a “literal approach” – which phrase I think can in this context be something of a snare – but by the application of the context and the legislative scheme. Doing that, it seems to me that paragraph 10 (6) can and should properly be read as applicable to a non-panel member operating under a General Criminal Contract. That is not writing in new words or glossing paragraph 10 (6): rather it is the whole premise of the 2007 Funding (Amendment) Order, and of Part 2 of Schedule 2, which of course has to be read as a whole.

It also follows, in my view, that the amendment with effect from 3^rd August 2009 of paragraph 10 (5) has no bearing on the meaning of paragraph 10 (6). No consequential amendment was made to paragraph 10 (6) because none was called for; and the fact of such amendment to paragraph 10 (5) does not in any way connote an understanding that paragraph 10 (6) would generate GFS fees for VHCC panel members on withdrawals.

It follows that, with all respect, I consider that the Costs Judge was wrong in his decision on this point.

That conclusion strictly renders unnecessary a decision on the second issue. However as I heard full argument on it I will also express my conclusion on it.

I consider that (if fees were to be paid on the GFS basis) the assessment should be on the footing of a plea at the PCMH, not on the footing of a cracked trial.

In contrast with a preparatory hearing, there is no statutory definition of a PCMH. But the PCMH is, of course, the subject of Part IV of the Consolidated Practice Directions for Criminal Proceedings, which is an adjunct to the Criminal Procedure Rules. The Practice Direction seems to contemplate one PCMH for an individual defendant.

In Part 1 of the 2007 Funding (Amendment) Order, “cracked trial” is defined to mean:

“…a case on indictment in which-

(a)

a plea and case management hearing takes place and-

(i)

the case does not proceed to trial (whether by reason of pleas of guilty or for other reasons) or the prosecution offers no evidence and

(ii)

either-

(aa)

in respect of one or more counts to which the assisted person pleaded guilty, he did not so plead at the plea and case management hearing; or

(ab)

in respect of one or more counts which did not proceed, the prosecution did not, before or at the plea and case management hearing, declare an intention of not proceeding with them; or

(b)

the case is listed for trial without a plea and case management hearing taking place;

.…”

“Guilty plea” is defined to mean:

“…a case on indictment which-

(a)

is disposed of without a trial because the assisted person pleaded guilty to one or more counts; and

(b)

is not a cracked trial;

.…”

Mr Watson submitted that the PCMH was the hearing of the 21^st and 22^nd January 2010: it was at that hearing that Mr Phillips was arraigned and pleaded guilty; it was at that hearing that HHJ Southwell had contemplated arraignment would take place; and that hearing was consistently described at the time by all concerned as a PCMH. On the footing therefore, as it were, that it looked like a PCMH and sounded like a PCMH it was a PCMH. The previous hearing listed for 30^th November and 1^st December 2009, on the other hand, however it may have been designated at the time, was, he submitted, not a PCMH, if only because no arraignment occurred.

Mr Lewis, on the other hand, submitted that the PCMH was the hearing listed for 30^th November 2009 and 1^st December 2009. That had been listed as a PCMH and was intended to be a PCMH. It is true that (not least because dismissal applications had been mooted) no arraignment occurred then. Nevertheless this was a substantive hearing at which substantive directions were given – not least, he said, the severance of the counts and the fixing of the various trial dates. Accordingly, this was the PCMH: and the subsequent plea offered and accepted at the next hearing in January 2010 caused this to be a “cracked trial” for the purpose of the 2007 Funding (Amendment) Order.

The Costs Judge considered his own previous decision in the case of R v Rayan (SCCO Ref: 50/10; 1^st June 2010). In that case, he had held that for a PCMH to be effective there must be a plea and there must be case management directions; alternatively, at all events, there must be “sufficient directions” to make the hearing into a PCMH. In the present case, he adopted that alternative approach and held that even if a plea did not take place a hearing could still be an effective plea and case management hearing if “effective” case management decisions are given. On that basis, and having regard to the directions given at the hearing of 30^th November 2009, he held that that was the PCMH; and that, since the plea was tendered subsequently, fees should be assessed on a cracked trial basis.

I appreciate the present evaluation is one on the facts and circumstances of the particular case and I bear in mind Mr Lewis’ point as to the need to have due regard to such an evaluation by an experienced and careful Costs Judge. But my own clear view is that Mr Phillips did plead at the PCMH and that this was not a cracked trial case.

I do not agree with the primary submissions of either Mr Watson or Mr Lewis on this (although when I raised the point that was in my mind Mr Watson, on reflection, did not strenuously seek to argue against it). As I see it, on the particular facts and circumstances of this case, there was one PCMH – and that embraced both the hearing dates of 30^th November and 1^st December 2009 and the hearing dates of 21^st and 22^nd January 2010. After the latter hearing dates, trial of Mr Phillips was no longer a live possibility.

That this is so is borne out by:

Mr Lewis did suggest, as an alternative, that if the hearing listed for 30^th November and 1^st December 2009 did not constitute a PCMH then the various directions given, not least the severing of the indictment and the fixing of the trial dates for the four (now separate) trials, meant that the case was listed for trial “without a PCMH taking place” for the purpose of the definition of “cracked trial” in the 2007 Funding (Amendment) Order. That cannot be right, given what I have said above. In any event, even if – contrary to my own view - it could be said that the first hearing was not (part of) a PCMH, the second hearing, at which pleas were taken and further directions given, undoubtedly was. I should add that Mr Lewis submitted in fact also that if a matter was listed as a PCMH and if a defendant at that hearing pleaded guilty and there were in consequence no effective case management directions given, but simply an adjournment for reports and sentence, then there was no PCMH for the purpose of the 2007 Funding (Amendment) Order. That simply cannot be right: first as a matter of ordinary Crown Court practice and understanding; and second by reason of the very terms of the 2007 Funding (Amendment) Order: whereby the definition of “cracked trial” incorporates contemplation of a person not pleading guilty at the PCMH (and in consequence, by necessary implication, contemplation of a person pleading guilty at the PCMH).

Reference may also be made in this context to the general observations of Lloyd Jones J in his judgment in Lord Chancellor v Frieze [2007] Costs L.R. 684, [2007] EWHC 1490 (QB), with which I agree.

I do not think it right here myself to attempt a definition of what is a PCMH for present purposes: not least because ultimately what is or is not properly to be styled a PCMH will need to be decided by reference to the circumstances of the case. It is sufficient for me to say that, in the present case, Mr Phillips in my view did plead guilty at a PCMH: and this was not a cracked trial for the purposes of the GFS, had it been applicable.

I therefore consider that the Costs Judge reached a wrong conclusion on this point also.

I am under no illusions as to the impact this decision of mine will have on the respondents given the potential differentials in the fees payable. However it is my duty to apply the 2007 Funding (Amendment) Order as I interpret its provisions. Doing that, I must allow the appeal.

The Lord Chancellor has – very fairly – indicated that he does not intend to seek costs if his appeals succeed: as they have done. There will therefore be no order as to the costs of these appeals.