Football Association Premier League & Anor v Lord Chancellor

This is an appeal from Costs Judge (or, as he is also known, Master) Rowley.

The Appellants are the Football Association Premier League (‘FAPL’) and Sports Information Services Ltd (‘SIS’). From time to time both organisations bring private prosecutions. In particular, FAPL prosecuted O’Leary, Dodds and Haggerty for conspiracy to defraud contrary to Fraud Act 2006 s.11(1). The Defendants either pleaded guilty or were convicted. SIS prosecuted William Marston who had broken into encrypted horse and greyhound racing channels. He was convicted or pleaded guilty to an offence under Copyright Designs and Patents Act 1988 s.297A(1)(a).

In each case an order was made that the prosecutor should receive its costs out of central funds pursuant to Prosecution of Offences Act 1985 s.17.

Where such an order is made instead of the court quantifying the costs to which the prosecutor is entitled out of central funds, there can be an assessment by a Determining Officer. That procedure was followed in each of the cases with which we are concerned.

The Determining Officer in the FAPL case was Ms Helen Thompson. The Determining Officer in the SIS case was Mr Peter Fitzgerald-Morris. Neither Ms Thompson nor Mr Fitzgerald-Morris allowed the Appellants to recover any of the costs or expenses which were incurred prior to the commencement of the criminal proceedings, that is any of the costs prior to the issue of a summons or before an information had been laid.

From decisions of Determining Officers there is a right of appeal to a Costs Judge. FAPL and SIS exercised this right. The appeals were heard together by Master Rowley on 6th February 2020. He reserved his decision which he handed down on 6th August 2020.

In brief, Master Rowley agreed with the Determining Officers that costs or expenses incurred before the commencement of the criminal proceedings could not be recovered out of central funds.

Master Rowley acknowledged that his decision involved a point of law of general importance. He certified this as,

Such a certificate is a necessary pre-condition to the Appellants being able to appeal to the High Court from the Costs Judge’s decision (see Costs in Criminal Cases (General) Regulations 1986 (‘CCCGR 1986’) regulation 11(3). The decision of the High Court is final (see regulation 11(7)).

The sums in issue can be substantial. In the FAPL case, for instance, some £87,050.33 was disallowed on the basis that these were costs or expenses incurred before the commencement of the criminal proceedings. In the SIS proceedings some £78,846.30

The appeal first came before me sitting as a single judge. I drew attention to the fact that the decision of the High Court was final: there could be no appeal to the Court of Appeal or the Supreme Court. I asked if the parties were content for me to continue to hear the appeal or whether they wished to apply for the appeal to be adjourned to be re-listed in front of a Divisional Court. The parties agreed that that they wished the matter to be adjourned, which I agreed was appropriate. The matter has subsequently come before a Divisional Court composed of Dingemans LJ, Nicol and O’Farrell JJ.

In advance of the adjourned hearing, the Court had asked the parties for their submissions as to whether a Divisional Court, as opposed to a single judge of the High Court could consider the appeal. This inquiry was prompted by the terms of regulation 11(7) which says,

The parties responded with commendable speed in a joint note of the same date (16th March 2021) in which they submitted that the appeal could be heard by a Divisional Court. Some of what follows below draws on that joint note.

Part 52 of the CPR is concerned with appeals. It particularly affects the Court of Appeal, but it is not limited to that Court and also applies to the High Court when that court is exercising an appellate function.

CPR r.52.20 is entitled ‘Appeal Court’s powers’. Rule 52.20 (4) and following says, ‘(4) The appeal court may exercise its powers in relation to the whole or any part of an order of the lower court.

There is a Practice Direction – Practice Direction 52B - specifically for appeals to the County Court and the High Court, but it contains nothing material to the present issue.

By s.19(3)(a) of the Senior Courts Act 1981,

By s. 66(1) of the Senior Courts Act 1981,

In 2017 the CPR were amended by the Civil Procedure (Amendment No.2) Rules 2017 SI 2017 No. 889. Rule 3 made amendments to Part 3 of the CPR. As amended and so far as material, it reads,

In my view, the parties are correct that the Divisional Court has jurisdiction to hear this appeal for the following reasons:

Accordingly, I consider that, as a Divisional Court, we could continue to hear the substantive appeal.

As I have said, the power to order costs out of central funds is contained in Prosecution of Offences Act 1985 s.17 (‘POA 1985’). However, the argument in this appeal travelled over other powers in relation to costs and it is convenient to set these parts of the Prosecution of Offences Act 1985 out at the same time.

Regulations have been made by the Lord Chancellor under the 1985 Act. They include the CCCGR 1986. Regulation 7 says,

The jurisdiction of the civil courts to award costs derives from Senior Courts Act 1981 s. 51 which says, so far as material,

Section 52 of Senior Courts Act 1981 makes clear that, while there may be Rules of the Crown Court, they may not authorise the payment of costs out of central funds – see 52(3).

Master Rowley recognised that the same phrase ‘in the proceedings’ was used in both s.17(1) (prosecution costs out of central funds) and s.16(6) (defence costs out of central funds). He appears to have accepted that the same meaning should be given to the same phrase in both contexts (and see to this effect R (Virgin Media Ltd) v Zinga [2014] EWCA Crim 1823). Judge Rowley saw the judgment of Auld LJ in R (Hale) v North Sefton JJs [2002] EWHC 257 (Admin) (‘Hale’) as allowing a degree of elasticity in the interpretation of the phrase before proceedings had begun in that case a decision of the magistrates to disallow the costs of a defendant’s interview with a solicitor after the defendant had been arrested and was on police bail but before he had been charged was quashed on judicial review. Master Rowley said that this elasticity was ‘fairly limited’ in the context of a prosecutor’s costs incurred before an information was laid and would not stretch to the beginning of an investigation into a possible prosecution. The court in Hale had, however, upheld the refusal to allow the costs of a consultation with the solicitor after the defendant had been acquitted. Master Rowley summarised this as meaning that there was no equivalent elasticity after the conclusion of the criminal proceedings.

Master Rowley did not consider that the provision regarding costs in civil proceedings (i.e. Senior Courts Act 1981 s.51) was of any assistance. That was because the civil courts had power to determine the costs ‘of and incidental to the proceedings’. As Sir Robert Megarry V-C had said in In Re Gibson’s Settlement Trusts [1981] Ch 179 the emphasised words significantly added to the Court’s power. For this reason, Master

Master Rowley also thought that the power to make an order that the defendant pay the prosecution’s costs (Prosecution of Offences Act 1985 s.18) was also immaterial since the critical issue there was whether such an order would be ‘just and reasonable’. It was therefore immaterial that under s.18 the costs of the investigation which led to the proceedings could be recovered by the prosecutor (see Neville v Gardner Merchant Ltd (1983) 5 Cr. App. R. (S) 349 and Re Associated Octel Ltd [1997] 1 Cr. App. R (S) 435).

Master Rowley also considered that the House of Lords case of Steele Ford and Newton [1994] 1 AC 22 was relevant. This had held that there was no inherent power to order costs to be paid out of central funds. As Master Rowley said at [65] of his judgment,

Mr Bacon QC, on behalf of the Appellants, submits that Master Rowley reached the wrong conclusion. He argues:

Mr Bacon submitted that the Appellants’ case was fortified by the decision of the Court of Appeal in Murli Mirchandani v Lord Chancellor [2020] EWCA Civ 1260 which had been decided on 2nd October 2020 and so subsequent to Master Rowley’s decision.

Mr Clarke, on behalf of the Lord Chancellor, opposed the appeal. He submitted that Master Rowley was right for the reasons which he gave. In addition, he relied on the Notes to Clause 16(1) (which became s.17(1) of the Prosecution of Offences Act 1985. These said,

The critical phrase is thus ‘in the proceedings’ in s.17(1). Section 21(1) of the Prosecution of Offences Act 1985 provides a definition of the term ‘proceedings’ but I agree with the parties that this definition adds nothing material to the issue before us.

I think that there is force in Mr Bacon’s submission that Master Rowley was wrong to treat the commencement of the prosecution as a bright line, before which no costs incurred by the private prosecutor could be reimbursed out of central funds.

As Master Rowley noted, the phrase ‘in the proceedings’ is used both in s.17(1) and

The Lord Chancellor and Master Rowley acknowledged this, yet, beyond saying that all investigation costs and other pre-commencement costs could not be recovered out of central funds, neither offered reasons as to why the costs incurred by the Appellants were irrecoverable.

As Mr Clarke submitted, it may be easier to see how pre-commencement costs by a defendant were incurred when a prosecution was imminent, but that is not a principled basis for distinguishing between pre-commencement costs which are properly regarded as having been incurred ‘in the proceedings’ as both ss.16(6) and 17(1) require.

Mirchandani concerned a private prosecution by Mr Mirchandani of Mr Somaia. Mr Somaia was convicted at the Central Criminal Court before HHJ Hone QC and a jury. Mr Somaia was sentenced to 8 years imprisonment. Mr Mirchandani sought a confiscation order under the Criminal Justice Act 1988 (the offences in question having been committed before the commencement of the current legislation, the Proceeds of Crime Act 2002) which Judge Hone granted on 12^th January 2016 in the sum of £20,434,691. Mr Mirchandani did not pay the confiscation. In due course, a receiver over Mr Mirchandani’s property was granted by Spencer J. By that time an issue had arisen as to whether certain transactions by the defendant to his wife, Alka

It will be seen that Jefford J. was not hearing an appeal from a Costs Judge which was why CCCGR regulation 11(7) was not an obstacle to the Court of Appeal exercising jurisdiction.

The Court of Appeal allowed the appeal on both issues. The leading judgment was given by Davis LJ, with which the President of the Queen’s Bench Division agreed, as did the Master of the Rolls, ‘after much soul-searching’.

Davis LJ identified the two issues which confronted the Court of Appeal as,

Mr Bacon referred us in particular to the following aspects of the decision:

I agree with Mr Bacon that Mirchandani at [81] stands for the proposition that, for pragmatic and policy reasons, the circumstances in which prosecution costs were recoverable out of central funds was intended to be more generous than the circumstances in which a defendant’s costs could be recouped from central funds. Yet the decision of Master Rowley has the opposite effect.

Both Mirchandani and Zinga also emphasised the public interest in private prosecutions, particularly in the fields of fraud and intellectual property rights. While there are limits on the extent to which a purposive interpretation can trump clear language to the contrary, in my view, there is no such clear language in this case. As I have already noted, Master Rowley accepted the evidence from F.A.C.T. that, unless investigative costs could be recovered out of central funds, private prosecutions would not be viable. I agree with Mr Bacon that there is something of a parallel with Mirchandani. In that case, the Court of Appeal said that, absent the enforcement of a confiscation order, confiscation proceedings would be ‘toothless’. So, too, Mr Bacon said, if investigative costs could not be recovered out of central funds, private prosecutions would not get off the ground.

I also agree with Mr Bacon that Steele Ford and Newton is of limited assistance in the present context. Section 17 of the 1985 Act gives express authorisation for the payment of costs out of central funds. The situation is therefore very different from the position in that case where the solicitors were driven to rely on inherent jurisdiction or an implied power to order costs out of central funds. I do accept that the courts must be vigilant as to the expenditure of public funds and, to this extent, must be cautious as to the extent to which costs may be reimbursed, but Mr Bacon was right to remind us that, even if we interpret the phrase ‘in the proceedings’ in a manner which permits the private prosecutor to recover some of the precommencement costs, there is still a restraining factor: the costs must anyway be no more than are reasonable and, by s.17(2A) if there are circumstances which mean that the prosecutor should not be able to recover the full amount of his costs, the court may instead order that he recover such amount as is just and reasonable.

I was not persuaded by Mr Clarke’s analysis of the legislation which preceded the Prosecution of Offences Act 1985. As Mr Bacon submitted, that Act introduced a wholly new regime (including the establishment of the Crown Prosecution Service). In my view, the previous legislation does not assist us in deciding the meaning of the 1985 Act.

As for the Lord Chancellor’s reliance on the Notes to Clause 16 (now s.17 of the 1985 Act), Mr Bacon referred us to R (Public and Commercial Services Union)v Minister for the Civil Service [2010] EWHC 1027 (Admin), [2011] 3 All ER 54 in which Sales J. said at [55] that Notes on Clauses were not a proper aid to the interpretation of an Act of Parliament, whether or not they were circulated to the legislature. In the present case, there was no evidence that the Notes were circulated either to peers or to MPs and Mr Clarke did not suggest that the comments in the Notes were articulated by a responsible minister in the course of debates so that they were an admissible aid to construction in accordance with Pepper v Hart [1992] UKHL 3, [1993]AC 593.

I do agree with Master Rowley that the provision regarding costs in civil proceedings is different since it refers to costs of ‘and incidental’ to the proceedings. I consider that this means that the civil cases are of no assistance in interpreting s.17 and I, therefore, respectfully differ from Master Gordon-Saker who thought the contrary in R (Blinkhorn) v Camilleri 28.08.19 SCCO Ref AGS5719 at [42]. Similarly, the power to order costs against a party (Prosecution of Offences Act 1985 s.18) has a different jurisdictional requirement. It may be that the outcome is the same under both s.17 and s.18, but the route to that conclusion will have been different.

As for the direction of the National Taxing Director of July 2016, Mr Clarke accepted that this added little to the Respondent’s argument. Either the direction accurately reflected the law, in which case it provided no additional weight, or it did not, in which case Mr Clarke acknowledged that it could not, by itself, justify Master Rowley’s conclusion.

In my view, the ground of appeal regarding legitimate expectation likewise adds nothing to the Appellants’ case. If the interpretation of the law is as they propose, it is unnecessary to rely on legitimate expectation. If the law is not to be interpreted as the

As I have said, I do not agree that the commencement of the prosecution represents a bright line, before which no items of expenditure may be recovered from central funds. It seems to me that, even if incurred before the issue of a summons or the laying of an information, steps may properly be regarded as having been taken ‘in the proceedings’ for the purposes of s.17(1) (or, for that matter, for the purposes of s.16(6)). Purely by way of example, costs may have been incurred in drafting the summons or charge, in assembling witness statements to be used in the prosecution or in assembling materials which the prosecutor would be required to produce by way of disclosure.

It follows that I also agree with Master Whalan who, in R (TM Eye Ltd) v Pama and Co Ltd and others 26th February 2021 SCCO reference 239/19 and 240/19, declined to follow Master Rowley’s decision in the present case.

If my Lord and my Lady agree with what I have said, I would propose that the case is remitted to the Costs Judge to decide which of the pre-commencement costs and expenses come within s.17. The Costs Judge by CCCGR regulation 10(12) will have all the powers of a Determining Officer. I would also remit to the Costs Judge the power to decide whether, in accordance with s.17(2A) of the 1985 Act there are circumstances making it inappropriate for the prosecutor to recover the full amount of the costs as in s.17(1) and, if so, to determine what lesser sum is just and reasonable.

I agree.

I agree with the judgment of Nicol J. that the appeal should be allowed and the case remitted to the costs judge. I wanted, however, to say something about whether the Divisional Court had jurisdiction to hear this appeal.

As appears from regulation 11(7) of the Costs in Criminal Cases (General) Regulations 1986, set out in paragraph 12 of the judgment of Nicol J., provision is made for the appeal to “be heard and determined by a single judge whose decision is final”. This provision in the Regulations exists to ensure, so far as possible, that costs proceedings do not themselves become expensive satellite proceedings following the original criminal proceedings. In circumstances where we have not heard contested argument about the point I do not express a view about whether the reference to Part 52 of the Civil Procedure Rules in regulation 11(7), which itself refers to case management powers in Part 3 of the Civil Procedure Rules, gives jurisdiction to permit the single judge to refer the matter to the Divisional Court and, if there is such jurisdiction, whether the case management discretion should be exercised in accordance with the scheme of the Regulations so that the appeal should be heard only by a single judge.

I do agree with Nicol J. that in circumstances where he made an order directing that the appeal should be heard by a Divisional Court, and that order has not been appealed, then this Divisional Court has jurisdiction to hear and determine the appeal. This is for the reasons set out in Strachan v Gleaner Co Ltd [2005] UKPC 33; [2005] 1 WLR 3204 at paragraph 29. This is because Nicol J.’s order directing that the hearing be before a Divisional Court is valid and effective unless or until it is set aside on appeal.