T (A Child)

In care proceedings, the general proposition favouring no order as to costs in children cases does not apply where a local authority raises very serious allegations and fails to establish them at a fact-finding hearing. The court must exercise its discretion from a clean sheet. The unsuccessful party’s responsibility for generating the successful party’s costs may be decisive, particularly where the allegations were grave, professional representation was reasonably necessary, and the party was exonerated. A comparatively trivial lie on an unrelated issue should not distort the costs decision.

A local authority brought care proceedings concerning two children and made serious allegations of physical, sexual and emotional harm against their paternal grandparents. The grandparents were joined as parties, borrowed money to fund legal representation, and incurred substantial costs during a five-and-a-half-week fact-finding hearing. The judge rejected all allegations against them and discharged their status as parties, but refused their application for costs, relying on the general no-order principle and a selective reading of Re J (Costs of Fact Finding Hearing) [2009] EWCA Civ 1350. The grandparents appealed. The central issue was whether that general principle governed costs following an unsuccessful fact-finding case brought by a local authority.

1. Appeal allowed. The Court of Appeal unanimously held that the county court judge had exercised his discretion on a wrong basis. The local authority was ordered to pay the grandparents’ costs of and incidental to their intervention, to be assessed on the standard basis if not agreed.
2. The ordinary rule that costs follow the event did not apply to family proceedings. Nor did the general proposition favouring no order as to costs in children cases apply to this fact-finding hearing. The judge should therefore have started with a clean sheet, rather than treating either general rule as determinative.
3. The court applied the reasoning in Re J (Costs of Fact Finding Hearing) [2009] EWCA Civ 1350. A bespoke fact-finding hearing places the allegations in a separate compartment, with a ring fence around the costs referable to them. Those costs fall outside the ordinary paradigm in which no order is made. The distinction between allegations raised by a local authority and allegations defended by a private party did not justify a different approach.
4. On the clean-sheet assessment, the grandparents’ unsuccessful opponent would often be regarded as responsible for generating the successful party’s costs. The extreme seriousness of the allegations, the reasonableness of the grandparents’ decision to secure professional representation, and their complete exoneration were matters of decisive importance. The judge’s reliance on the grandmother’s lie about a comparatively trivial point was irrational in the circumstances and should not have affected the appropriate order.
5. The reasonableness of the grandparents’ solicitor remaining throughout the hearing could be examined by the costs judge on detailed assessment.

• Court of Appeal (Civil Division): allowed the appeal and ordered the local authority to pay the grandparents’ costs on the standard basis if not agreed.
• Kingston-upon-Hull County Court: on 7 May 2010, His Honour Judge Dowse refused the grandparents’ application for costs following the fact-finding hearing.