Littlewoods Organisation Plc, R (on the application of) v Customs and Excise

Where parties resolve judicial review proceedings through negotiation, the costs order should reflect the parties’ conduct and the circumstances in which agreement was reached. A claimant seeking a more extensive remedy cannot fairly recover its costs where it knew of, but declined, a less extensive interim arrangement and continued to pursue the wider relief. In such circumstances, the fair order may be that each party bears its own costs, including the costs of the costs hearing.

Littlewoods sought long-term approval from Customs and Excise for estimation under Regulation 29(3). The parties subsequently agreed that Customs would permit estimation on a trial basis so that Littlewoods could demonstrate whether it could improve its performance. The question before the court was whether Customs should pay all or part of Littlewoods’ costs.

1. The proceedings had been resolved by a sensible arrangement. Customs would allow Littlewoods to use estimation in order to assess whether it could improve, while the question of long-term estimation under Regulation 29(3) remained to be considered in the future.
2. Littlewoods argued that the guidance had been unclear about the availability of short-term approval. It also argued that, because a Customs official had considered short-term approval in May 2002 without informing Littlewoods, an earlier agreement might have been reached.
3. The court rejected that submission. Once Littlewoods learned in January 2003 that short-term approval might be available, it did not accept that arrangement or seek to negotiate on that basis. It continued to seek long-term approval.
4. Both parties had reasonably maintained their positions during negotiations. Customs sought improved efforts from Littlewoods, while Littlewoods maintained that it was entitled to long-term estimation. The proceedings therefore called for sensible negotiation and give and take from the outset.
5. The fair order was no order as to costs. Each party was to pay its own costs, including the costs of the day’s hearing.