Case No. CO/189/2001
Neutral Citation Number: [2001] EWHC Admin 455 
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

Royal Courts of Justice
Strand, London WC2

Date: Friday, 15th June 2001

B e f o r e:

MR JUSTICE COLLINS
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APPLICATION

LEACH
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Computer‑aided Transcript of the Stenograph Notes
of Smith Bernal Reporting Limited
190 Fleet Street, London EC4A 2HD
Telephone No: 0207‑421 4040/0207‑404 1400
Fax No: 0207‑831 8838
(Official Shorthand Writers to the Court)
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MR T CORNER (instructed by Pulvers of 114A High Street, Watford, WD1 2BL) appeared on behalf of the defendant

The claimant did not appear and was not represented
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JUDGMENT

Friday, 15th June 2001
1.	MR JUSTICE COLLINS: This is an application by the Commissioner for Administration for an order that the claimant pay his costs incurred in and about the submission of an acknowledgement of service which gave reasons why permission should not be granted for a judicial review application to be made by Mr Leach.
2.	The application is, as far as I am aware, a novel one in the sense that the old practice of the Crown Office was that there had to be an ex parte application for leave to move for judicial review. That was normally dealt with on the papers although it could be dealt with by means of an oral hearing, and it being an ex parte application, normally no costs were awarded in favour of the potential respondent, even if he chose either to make representations before the matter was considered on the papers or to attend at an oral hearing. There was power to award costs if a respondent attended at an oral hearing but it was a power that was very sparingly exercised. Accordingly, the assumption generally made by those who decided that they should seek permission to move for judicial review was that the application to the court would cost them nothing over and above whatever they had to pay for their own lawyers or in respect of the court fees.
3.	But, submits Mr Corner, the situation has now changed as a result of the coming into force of part 54 of the new rules. 54.7 requires that the claim form must be served on the defendant and any other interested party. 54.8 goes on to require that:
“Any person served with the claim form who wishes to take part in the judicial review must file an acknowledgement of service in the relevant practice form in accordance with the following provisions of this rule.” 
4.	That includes, of course, not only the defendant, but also any interested party, and there may be quite a number of such interested parties in the context of any given case.
5.	54.8(2) requires, among other things, that the acknowledgement must be filed not more than 21 days after service of the claim form and must be served on the claimant and any other person named in the claim form. By subparagraph (4), which is the important one, it is provided:
“The acknowledgement of service ‑
(a) must ‑
(i) where the person filing it intends to contest the claim   set out a summary of his grounds for doing so”, 
6.	and the rest I need not read.
7.	Accordingly, there is now, by the new rules, a positive requirement that not only should there be an acknowledgement of service filed, but that that acknowledgement of service should include a summary of the grounds for contesting the claim, and, as Mr Corner correctly submits, that will almost inevitably involve some work on the part of the defendant or the interested party in deciding what should be put in and how the desire to contest should be indicated.
8.	Of course, the purpose of the acknowledgement and its contents is to draw to the judge's attention (because now all applications are dealt with initially on the papers) any grounds which may not be apparent from the application to show that the claim is one which should not proceed. That includes, for example, delay or factual matters which are not referred to in the application but which are clearly material, or authorities or other statutory or other provisions which indicate that the claim is not one which has merit.
9.	As I say, speaking as a judge who has to deal with permission applications, an acknowledgement of service is an exceedingly helpful document in many cases because it does draw attention to matters which are not always readily apparent from the claim.
10.	The rule is mandatory. Rule 54.9 sets out the consequences of not complying with the requirements of 54.8. These are that: 
“(a) He may not take part in a hearing to decide whether permission should be given unless the court allows him to do so...”, 
11.	which may be a distinct disadvantage if there is an oral application because the application is refused by the judge on paper but is renewed orally before another judge, or interim relief is claimed and that application requires there to be a hearing.
12.	54.9 goes on:
“But ‑
(b) provided he complies with rule 54.14 or any other direction of the court regarding the filing and service of:
(i) detailed grounds for contesting the claim or supporting it on  additional grounds and any written evidence may take part in  the hearing of the judicial review.” 
13.	Then subparagraph (2):
“Where that person takes part in the hearing of the judicial review the court may take his failure to file an acknowledgement of service into account when deciding what order to make about costs.” 
14.	The purpose of subparagraph (2) would appear to be that where points which showed that the claim lacked merit were not made at the permission stage but were raised on the hearing, the court might take the view that it was not fair that the applicant should pay the extra costs which could have been avoided if only the points had been made at the earlier stage. But that, of course, only underlines the point made by Mr Corner, that if that is one of the purposes behind the new provisions, and the requirement is there, then why should the successful party, in this case the defendant, have to bear the costs of putting forward his objections to the claim if those objections then serve to defeat the claim? Why should he be required by the rules to incur costs which he can never recover, even if he is successful as a result of what he has done? That, submits Mr Corner, is manifestly unfair, and I agree with him. It clearly is on the face of it, and having regard to the new rules, it is difficult to see that there is any sensible answer to the submission which Mr Corner has made. It seems to me that, in principle, he must be right, and that if a defendant incurs costs in submitting an acknowledgement of service, as required by the rules, then he ought to be able, if he succeeds, to recover his costs of so doing.
15.	How much in principle should he be able to recover? It seems to me that it should be limited to the costs incurred in actually producing the acknowledgement, and those will obviously depend on the circumstances. As I indicated in the course of argument, it may be that if an application for judicial review comes, as it were, out of the blue or without any sufficient advance warning, then it will be more expensive for the defendant to put together material for his acknowledgement of service. If, on the other hand, there has been, as there should be, advance warning and contentions made beforehand so that the decision can be reconsidered, if it ought to be, and so that the defendant knows in advance what the issues are, then obviously the costs will be likely to be far less, because, in my view, it would not be appropriate for the costs involved in the acknowledgement of service to include the costs incurred in dealing with threatened, as opposed to actual, proceedings.
16.	That may seem harsh to an extent, but otherwise the position of a potential applicant is, as it seems to me, prejudiced because he will not know, when he has acted properly in giving advance notice, what he is potentially letting himself in for. If it is merely a question of costs incurred in the acknowledgement of service, they are likely to be relatively modest. If, on the other hand, he chooses to plunge into litigation without doing what he ought to do in advance and giving the necessary warning, then it may be that he is asking for trouble and asking for the amount to be significantly greater.
17.	But it seems to me that if this is to prevail, and if I am right in my conclusion that, in principle, costs should be awarded, it is thoroughly undesirable that there should be a need for an application such as has had to be made in this case to obtain such costs. That, of course, only adds to any amount which is payable.
18.	It is obvious that the Rules Committee is going to have to consider in detail the implication of this decision, but, as it seems to me, it ought to be dealt with by the judge when he deals with the permission application, and that can only happen if the application for costs is made in the body of the acknowledgement and an indication is given as to the amount of costs which are being requested. That, of course, would have to be served on the other side, who would have to have an opportunity to deal with it.
19.	I am very unhappy with the delays that that could occasion and the problems that that could give rise to, but it is obviously absurd, because of the costs incurred, that there should have to be an application such as this in every case where costs are asked for. Of course, in many cases a public body will not consider applying for costs because, for example, it is obvious that the claimant is not worth powder and shot or the claimant is publicly funded, or there may be other good reasons, but, as Mr Corner has indicated, the Commissioner for Local Administration receives in the course of a year a significant number of judicial review applications, most of which are unmeritorious and defeated at the permission stage. But it is often necessary in such applications for the judge to be properly informed of what the position really is, and it is frequently the case that applications do not identify matters of relevance which might well, and indeed in many cases do, serve to defeat the application at the permission stage.
20.	The Commissioner is very concerned at the amount of money that is being spent, and which hitherto has perhaps been regarded as irrecoverable, in undertaking this exercise. If the rule were that it was permissible to make representations, and it was clear that there was no compulsion, then different considerations might apply, but, as it seems to me, the compulsion makes the application that has been made before me impossible to reject.
21.	I am conscious, as I say, that I have not been able, since this is an extempore judgment and it would be equally undesirable to reserve to incur yet further costs, to have spelt out precisely what should be done for the future. One thing that seems to me to be essential is that this decision of mine, that in principle costs ought to be awarded, must be given wide publicity because I suspect that claimants at the moment are simply unaware that they run the risk of orders such as this as a result of the change in the rules. Certainly, if I may say so, it appears that the solicitors representing the claimants in this case were unaware of that possibility and were relying on the practice that existed under the old rules.
22.	I am sorry in a way that I have not been able to make further enquiries to ascertain what changes might be desirable before having to deal with this matter today. Equally, for very understandable reasons, the claimant has decided not to attend the hearing but has written to the court indicating his objection, through his solicitors, to the proposed order, and I have had regard to that letter, as I have to the correspondence which has been put before me which preceded and came after the application was made.
23.	The refusal of permission was on 15th March last. This application was lodged on 2nd May. On 8th May, warning having been given in advance that the application was to be made, the defendant's solicitors wrote to the claimant's solicitors saying:
“... we now enclose a copy of our application for costs in this matter.
We trust that on consideration of the application you will agree that our clients are entitled to a Cost Order, in which case we can submit a figure to you for agreement.” 
24.	That was met with a response on 17th May saying that they were unable to understand the letter making reference to rules 54.8 and 54.9 which, by their reckoning, referred to habeas corpus, whereas matters relating to judicial review were dealt with under rule 53. It is difficult to conclude other than that the solicitors were unfortunately wholly unaware of the new rules, which came into force last year, and which have now substituted rule 54 for the old order 53.
25.	They have also put in their written submissions that the general rule that an unsuccessful party be ordered to pay the costs of the successful party has been modified under principles established by Lord Woolf, that no longer does it follow that any success is deemed sufficient to justify a costs order, and that such an order should be made having regard to the measure of success achieved.
26.	They make the point that Scott Baker J refused permission on the narrow ground that the application was made out of time. He did incidentally go on to indicate that in his view it lacked merit, but it is true that it was essentially because it was out of time. But it is difficult to see the force of that argument because the result was a total success in that the application was disposed of.
27.	They then go on to make submissions as to whether there had been a right of appeal against the order and whether it was a final one, which neither I nor Mr Corner were able to understand and which do not seem to me raise any conceivable ground for objecting to the order which I propose to make.
28.	They have indicated in a letter of 13th June that if I was with the defendants in principle then they would like to be heard on the amounts. That I propose to enable them to do, and I will not make any order as to amount.
29.	I was troubled as to whether I ought to include the costs of today, but having seen the correspondence, to which I have already referred, it seems to me that an opportunity was given to the claimant's solicitors to agree that they ought to pay in principle, but limited, of course, to the costs incurred in relation to the table application. They chose to assert that there was no ground for an order to be made and that necessitated the application that has been made by Mr Corner.
30.	It seems to me, therefore, that in principle the claimant should bear the total costs, albeit the total is the somewhat horrifying figure of nearly £6,000. However, as I say, he ought to have the opportunity of challenging the amounts, and what I propose therefore to do is to say that in principle the application of the defendant succeeds and that he is entitled, in my judgment, to the reasonable costs incurred in and about the submission of the acknowledgement of service and the application before me today to persuade me that the order for costs should be made.
31.	MR CORNER: I am grateful, my Lord. One thing occurs to me, I am just mindful of what you said about publicity in regard to your judgment. My Lord, it does seem to me that it is an important matter, as you have rightly said. I just wonder whether it would be sensible to ask that an expedited transcript be provided, if that is convenient, of course, to those who will have to provide it. That is one way of ensuring that people know about the judgment as quickly as possible.
32.	MR JUSTICE COLLINS: The shorthand writer has said that she can get it done by Monday, it will be early next week, and I will then have to be correct it. It should be available, hopefully, by the end of next week.
33.	MR CORNER: My Lord, thank you very much. May I thank the shorthand writer for offering to do it so quickly.
34.	MR JUSTICE COLLINS: Thank you, Mr Corner.
35.	MR CORNER: My Lord, I have just been asked by my solicitor whether we do have a formal order. I think we do.
36.	MR JUSTICE COLLINS: If you would like to check the precise details with the associate.