Brewer v Secretary of State for Justice [2009] EWHC 987 (QB), [2009] All ER (D) 95 (May)
Queen’s Bench Division, Holroyde J, 8 May 2009
The High Court has given guidance on claims for expenses in respect of professional services under the costs in criminal cases regime, including whether an order for costs in respect of ‘out of pocket’ expenses is limited to expenditure such as fares and subsistence or whether it covers professional fees including a second set of representations costs.
Jeremy Morgan QC (instructed by Layzells) for the claimant. Tim Buley (instructed by the Treasury Solicitor) for the Secretary of State.
In April 2001, the claimant was served by the Serious Fraud Office with a notice of intention to prosecute, relating to allegations of serious dishonesty. The claimant retained the services of his American attorney, T, who was acting for him in civil litigation in the United States. Under the agreement the claimant paid T a flat fee of £15,000 per month, plus her out of pocket expenses. T arranged for United Kingdom solicitors to act for the claimant and to instruct counsel. The claimant was arrested and charged in September.
Legal aid
He was granted legal aid a few days later. The matter proceeded to trial but, in December 2003, the judge directed the jury to return a verdict of not guilty. He also granted the claimant a defendant’s cost order, pursuant to s 16 of the Prosecution of Offences Act 1985 (POA 1985), both in respect of his out of pocket expenses after the grant of legal aid (the post-certificate period) and also to cover the period of time prior to the grant of legal aid where other expenses had been incurred (the pre-certificate period). The claimant’s English solicitors were paid £258,542 out of public funds, pursuant to the legal aid certificate and the costs order.
Parallel application
In March 2004, the claimant made a parallel application for reimbursement of costs of over £360,000 incurred as a result of T’s work on his case. A determining officer rejected the claim in relation to T in its entirety. On a redetermination, he allowed a further sum in respect of the claimant’s personal expenses, but no payments to T. The claimant appealed to the Supreme Court Costs Office (SCCO), which allowed, in light of the UK solicitors’ bills, £25,000 in respect of T’s work.
Divisional Court
The claimant brought proceedings in the Divisional Court, which, acting under the High Court’s inherent jurisdiction, quashed the determination made by the costs judge and remitted the appeal for a further hearing. At that hearing the costs judge held, in relation to the pre-certification period, that it would be inappropriate to allow the claimant to recover costs on the flat-fee basis which T had charged, without reference to the work actually done during each month. In that respect, he awarded the claimant a total sum of £20,700. In relation to the post-certification period, however, he held that the claimant could not recover the fees and expenses paid to T. The claimant appealed.
Holroyde J:
Two points of general principle were certified in respect of the appeal. The first was whether, having regard to reg 22 of Pt II Criminal Defence Service (General No 2) Regulations 2001 SI 2001/1437 and the decisions in R v Gittins [2007] EWCA Crim 807 and Wilson J in Goulden v Wilson Barca (a fi rm) [2001] 1 All ER 169, a claim for expenses in respect of professional services incurred after the date of a Representation Order were recoverable out of Central Funds by an applicant (being a person in whose favour a costs order had been made) either wholly or in part.
The second was whether an order for costs made in favour of an applicant out of Central Funds for “out-of-pocket” expenses was limited to expenditure such as fares and subsistence or whether it covered professional expenses including a second set of representation costs.
Principle
As a matter of principle, a person in whose favour a defendant’s costs order had been made might be allowed costs reasonably sufficient to compensate him for expenses incurred by him in the proceedings in respect of professional services, even if the certified point was intended specifically to relate to cases in which the professional services were legal services.
Whether such costs were in fact allowed would depend on whether in the circumstances of the particular case the applicant could bring himself within the statute and the regulations by showing that the expenses in question were properly incurred by him in the proceedings, and related to work which had actually and reasonably been done and/or disbursements which had actually and reasonably been incurred. In determining whether an applicant had so succeeded, the determining officer had to take into account all the relevant circumstances of the case, and had to resolve against the applicant any doubts he might have as to whether the costs were reasonably incurred or were reasonable in amount.
The fact that the lawyers instructed under the representation order had made their own claim for fees and disbursements did not necessarily rule out an applicant additionally being awarded sums to compensate him for expenses he had incurred; but that was likely to follow. The applicant’s claim was all the more likely to fail when the subject matter of it was 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).
Representation order
It had to 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 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 was made, it would often 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 was to determine the particular claim in accordance with the statute and the Regulations, and in doing so to take account of all relevant circumstances, his lordship did not wish to say anything which might be regarded as fettering his performance of that task in any way.
He suggested some circumstances relevant to a case involving 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. The determining officer would wish to consider:
(i) 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 would be obvious, but in some cases it might require careful consideration on an item-by-item basis.
(ii) the exact nature and purpose of the professional services provided. By way of illustration: expert evidence as to foreign law was likely to be outside the competence of the solicitors and counsel instructed under the representation order; but preparation of schedules and summaries would generally be well within their competence, and indeed would often be work suitable for fee-earners of a lower grade.
(iii) the reasons why it was 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.
(iv) the reasons why it was said such services could not be provided by the legal team instructed under the representation order, bearing in mind that the representation order was intended to provide the level of legal advice and representation appropriate to the specific case.
(v) the reasons why the claim did not form part of the solicitors’ claim for fees and disbursements under the representation order.
(vi) the basis on which, and the rate at which, the provider of the services charged the applicant.
(vii) the extent to which there was any duplication of, or overlap with, work also done by the lawyers instructed under the representation order.
(viii) what was said on the claimant’s behalf when the application for the defendant’s costs order was made in the criminal proceedings.
(ix) if the claimant’s application for reimbursement of his expenses was not made at the same time as the claim made by his lawyers under the representation order, the reason why that was so.
His lordship turned to the second certified question. He ruled that the expense of paying fees in respect of professional services was in principle capable of being an out-of-pocket expense. Although it did not arise in the instant case (which was concerned with the postcertificate 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.
There was no reason why the payments made to the first solicitor should not be described as an out-of-pocket expense. The meaning of the phrase could not alter according to whether it related to a pre-certificate or post-certificate period.
Quantum
His lordship held that it would be appropriate for advocates applying for a defendant’s costs order to indicate at least the heads of claim which would or might be made, and if possible to give a very rough indication of the expected quantum. In many cases, experience suggested that a very few words would 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 was anticipated, the judge should be alerted to it by at least an outline indication. In that way, the judge would have the opportunity to consider his powers under s16 (6) and s16 (7) POA 1985, and the risk of two claims being made and considered separately would be significantly reduced.
His lordship ruled that the out of- pocket expenses which might be awarded from central funds pursuant to a defendant’s costs order could in principle be substantial in quantum and/or relate to professional expenses, and were not necessarily limited in the way the master below thought.
Everything again depended in practice on whether in the circumstances of the particular case an applicant could bring himself within the statute and the Regulations by showing that the expenses in question were properly incurred by him in the proceedings, and related to work which had actually and reasonably been done and/or disbursements which had actually and reasonably been incurred.
His lordship then dealt with the claim on the facts.
