Supreme Court: We intend to stay out of costs cases

The Supreme Court made clear last week that it was unlikely to deal with cases solely about costs, saying they were an issue for the Court of Appeal instead.

President Lord Reed said it would “ordinarily be slow to intervene in matters of practice, including guidance given by the Court of Appeal as to the practice to be followed by lower courts in relation to the award of costs”.

He was giving the unanimous ruling in R (on the application of Gourlay) v Parole Board [2020] UKSC 50, an appeal against a decision not to award the claimant prisoner costs for his successful judicial review of a Parole Board decision not to transfer him to an open prison.

The Parole Board did not take part in the proceedings and the High Court decided not to make such an order, following the practice laid out in R (Davies) v Birmingham Deputy Coroner [2004] 1 WLR 2755 that, if a court or tribunal adopted a neutral stance in proceedings in which its decision was challenged, it would not be liable for the costs of the claim, unless there were exceptional circumstances. The Court of Appeal upheld the decision.

Lord Reed said responsibility for monitoring and controlling developments in practice generally lay with the Court of Appeal.

The Supreme Court could intervene where there has been an error of law, but “bearing in mind… the discretionary nature of decisions on costs, and the rarity of their raising any question of law of general public importance, appeals solely on costs are not ordinarily appropriate”.

The “counterpart of this restraint”, Lord Reed said, was that the Court of Appeal fulfilled its role, including in relation to costs. “It cannot do so, however, unless it is able to keep its decisions laying down principles of practice as to how lower courts should exercise their discretion in relation to costs, such as Davies, under review.

“That entails that its decisions on such matters cannot be treated as binding precedents, in the sense in which that expression is generally understood: that is to say, precedents which the Court of Appeal is required to follow…

“Were the position otherwise, the Court of Appeal would be severely restricted in its ability to introduce changes in practice, since any departure from its previous decisions could only be brought about by appeals to this court.”

At the same time, decisions such as Davies should only be reviewed “where there is sufficient reason to do so: as, for example, where there has been a material change of circumstances, or where the previous case was decided per incuriam”.

Otherwise, the Court of Appeal would face “repeated arguments about the principles to be adopted in costs cases, potentially divergent decisions, and the attendant risk of inconsistency and incoherence”.

The Court of Appeal here decided that no good reason had been put forward for reviewing the approach in Davies.

Lord Reed went on to uphold the original decision not to award costs. “In particular, [Mr Justice King] identified the point of central importance as being that the board had taken the decision under challenge while acting in a judicial or quasi-judicial capacity, and had not made itself an active party to the litigation.

“His conclusion that the board consequently fell within the scope of the practice described in Davies did not involve any error of law…

“In so far as the decision whether to award costs against the board turns on matters of practice, it would not be appropriate for this court, for the reasons explained earlier, to impose on the Court of Appeal its own assessment of the merits of the parties’ arguments.”

Lord Reed said the only other observation that needed be made in relation to the law “is that the fact that a party is in receipt of legal aid cannot affect the principles on which the discretion to award costs is normally exercised”.

Hugh Southey QC and Nick Armstrong (instructed by Chivers Solicitors) for the appellant. Ben Collins QC and Robert Moretto (instructed by the Government Legal Department) for the respondent.

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Costs News
Published date
10 Dec 2020

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