Costs Capping Orders And The Court’s Discretion As To Costs In Public Interest Judicial Review Proceedings

Elan-Cane, R (on the application of) v The Secretary of State for the Home Department & Anor

Prior to commencement of these public interest judicial review proceedings the parties had agreed in lieu of a costs capping order under sections 88 to 90 of the Criminal Justice and Courts Act 2015 that the recoverable costs on each side would be limited to the sum of £3,000.

The proceedings were ultimately dismissed and the Appellant was ordered to pay 67% of the SSHD’s capped costs i.e. £2,000.

The Appellant appealed the substantive decision, unsuccessfully, to the Court of Appeal.

The SSHD cross appealed the order for costs on grounds that the judge had erred in law by applying the reduction of 33% to the agreed £3,000 cap rather than the “much higher” actual costs of the SSHD, when calculating the amount of costs to be paid.

It was said that since the parties had agreed a mutual costs cap of £3,000, the effect of the judge’s order was to reduce the amount payable by the Appellant to the SSHD from £3,000 to £2,000. If, however, the reduction had been applied to the total amount of costs reasonably incurred by the SSHD in the proceedings, the resulting figure would still have greatly exceeded £3,000. Therefore, it was wrong in law for the judge to reduce the costs recoverable from the Appellant to less than the capped sum of £3,000.

The Court of Appeal did not agree. Giving the lead judgment, Lord Justice Henderson said:

“[the Court is not obliged to] approach the making of its order for costs at the conclusion of such proceedings as though the cap did not exist, until it is applied at the end of the process to whatever resulting figure is yielded by application of the normal principles set out in Rule 44.2. A mechanical approach of that nature would not in my judgment sit well with the underlying public policy which is engaged, and it may also lead to one or more of the undesirable consequences to which Mr Mountford has drawn attention. In my view, he is right to submit that the relevant considerations of public policy should inform the whole of the exercise of judicial discretion on costs at the conclusion of such cases, and there is no reason of law or principle why the judge should not, in an appropriate case, apply a percentage reduction to the amount of the capped costs rather than the uncapped costs.”