Judicial Review - Costs Update
October 7th, 2011 by Louise Humphreys
Posted In: Litigation
The general rule in legal proceedings is that the losing party pays the winning parties' legal costs.
However, a different rule has been applied in judicial review proceedings in cases where a public body concedes the claim shortly after legal proceedings are issued. Where this happens, the Courts had required the parties to bear their own costs unless it was "plain and obvious" that the claimant would have won the case. In other words, even though the claimant had won the case, the public authoity was not ordered to pay the claimant's costs.
This rule has now been reversed by the Court of Appeal in R (on the application of Bahta and others) v Secretary of State for the Home Department and others  EWCA Civ 895 (26 July 2011).
In giving judgment, Pill LJ said:
59. What is not acceptable is a state of mind in which the issues are not addressed by a defendant once an adequately formulated letter of claim is received by the defendant. In the absence of an adequate response, a claimant is entitled to proceed to institute proceedings. If the claimant then obtains the relief sought, or substantially similar relief, the claimant can expect to be awarded costs against the defendant. Inherent in that approach, is the need for a defendant to follow the Practice Direction (Pre-Action Conduct) or any relevant Pre-Action Protocol, an aspect of the conduct of the parties specifically identified in CPR r.44.3(5). The procedure is not inflexible; an extension of time may be sought, if supported by reasons.
65. When relief is granted, the defendant bears the burden of justifying a departure from the general rule that the unsuccessful party will be ordered to pay the costs of the successful party and that the burden is likely to be a heavy one if the claimant has, and the defendant has not, complied with the Pre-Action Protocol. I regard that approach as consistent with the recommendation in paragraph 4.13 of the Jackson Report.
The Bahta decision therefore re-establishes the rule that the unsuccessful party pays the successful party's costs unless there is a good reason not to grant such an award.
It is very important, therefore, for claimants to ensure that they comply with the Pre-Action Protocol and send a properly formulated letter before claim to the public authority in question. Likewise, public authorities need to ensure that they take seriously any letter received threatening judicial review and properly consider whether they have legal grounds for defending the claim; simply waiting to see whether a claimant is prepared to follow up on a threat to issue legal proceedings is no longer a viable option.