X, Y, Z (Minors), Re

In care proceedings, the ordinary position remains that there should be no order as to costs. The court may depart from that position where a party’s conduct is reprehensible or unreasonable, including unreasonable failure by a local authority to comply with disclosure duties. Costs must be limited fairly to work and hearing time caused by that conduct.

Where serious allegations are investigated at a fact-finding hearing and the subject is exonerated, the court starts with a clean sheet. Exoneration does not automatically require the local authority to pay costs. The court must consider who caused the allegations to be investigated, the court’s role in identifying issues, the parties’ proper participation in the process and whether additional costs were actually incurred.

Following a fact-finding judgment in care proceedings concerning three children, the mother, the father, the children and the mother’s partner applied for costs against Kent County Council.

The five Respondents claimed costs caused by the local authority’s unreasonable failure to comply with disclosure duties. The mother’s partner, IR, sought his costs because serious allegations against him had been investigated and he had been completely exonerated.

The court therefore considered the ordinary costs rule in care proceedings, the effect of fact-finding decisions in Re J (Costs of Fact Finding Hearing) and [2009] EWCA Civ 1350, and Re T (A Child) and [2010] EWCA Civ 1585, together with the consequences of the local authority’s disclosure failures.

The applications were determined in part in favour of the five Respondents and dismissed in relation to IR.

1. General costs position. The ordinary rule in care proceedings is that there should be no order as to costs. The rationale is that the proceedings are partly inquisitorial and should not be conducted on the basis that one party is the winner. The court may depart from that position where a party’s conduct is reprehensible or falls outside the band of reasonable conduct, as explained in Sutton London Borough Council v Davis and [1994] 2 FLR 569.
2. Disclosure failures. The local authority bore principal responsibility for failing to identify and disclose highly relevant documents. That failure was manifestly unreasonable and caused additional hearing time and legal work. Applying the approach in Sutton London Borough Council v Davis, the court ordered payment of costs attributable to three additional hearing days and one advocates’ meeting, together with specified work outside the Respondents’ public funding certificates. The court declined to attribute the whole hearing overrun to the disclosure failures and adopted a proportionate counterfactual assessment.
3. Fact-finding and exoneration. Following Re J (Costs of Fact Finding Hearing) and Re T (A Child), the court started with a clean sheet when considering IR’s application. That did not mean that exoneration automatically justified a costs order. The allegations against IR had been investigated at the court’s direction and on the father’s application. The local authority had properly taken responsibility for presenting the evidence after the court directed that the allegations be investigated.
4. The court also endorsed the caution that costs orders should not ordinarily be made by reference merely to the determination of historical facts. Where the court proactively identifies the issues to be investigated at a fact-finding hearing, the ordinary no-order position will generally remain appropriate.
5. IR had incurred no additional publicly funded costs as a result of the disclosure failures. His application was therefore dismissed. The local authority was ordered to pay £73,765 towards the other Respondents’ costs. Any application concerning the costs of the costs hearing was reserved.