Naureen & Anor, R (on the application of) v Salford City Council

Where judicial review proceedings end in a compromise which does not reflect the claimant’s pleaded claim, the usual position is no order as to costs. The court may depart from that position where it is tolerably clear which party would have succeeded at trial.

A benefit obtained through an independent third party does not make the claimant successful against the defendant. Obtaining interim relief on the basis that a claim is prima facie arguable likewise establishes no substantive success. Compliance with the pre-action protocol does not by itself justify an award where the defendant made no concession and the court determined no substantive issue.

An appellate court should not interfere with the first-instance costs discretion absent an error of law or principle.

The appellants were failed asylum seekers who sought judicial review of Salford City Council’s refusal to provide accommodation and support under section 21 of the National Assistance Act 1948. They contended that their health problems created a need for care and attention which could not be met in their hostel accommodation.

The Administrative Court granted interim relief pending a rolled-up hearing. Before that hearing, the Secretary of State granted the second appellant exceptional leave to remain and it became clear that the first appellant would receive the same status. The appellants therefore withdrew their claim because they would become entitled to mainstream benefits.

His Honour Judge Stewart QC ordered no costs because it was insufficiently clear which party would have won. The appellants challenged both the adequacy of his reasons and his exercise of discretion. The central issue was whether their interim success, protocol compliance, ultimate receipt of support, the council’s conduct or the alleged strength of their case required an award of costs.

1. Appeal dismissed. Jackson LJ, with whom Etherton and Moore-Bick LJJ agreed, held that Judge Stewart had adequately explained his decision. The judge had identified the decisive question and permissibly concluded that it was unclear which party would have succeeded at trial.

2. R (M) v Croydon London Borough Council [2012] EWCA Civ 595 was the governing authority. Where a compromise does not reflect the claimant’s claims, the default position will commonly be no order as to costs. The court may examine the underlying dispute where it is tolerably clear who would have won, but it should not conduct a substantive trial through a costs determination.

3. The appellants’ eventual access to housing and welfare benefits did not represent success against the council. That benefit resulted from the Secretary of State’s independent decision to grant exceptional leave to remain, rather than from a court order or concession by the council. A favourable intervention by a third party could not justify requiring the defendant to pay the appellants’ costs.

4. The interim order also established no substantive success. It merely protected the appellants pending a rolled-up hearing after they had met the modest threshold of showing a prima facie arguable case. The court had not determined permission or the merits. Since the reserved costs of that application had not separately been sought in the written costs submissions, Judge Stewart could not be criticised for making no specific order concerning them.

5. Although the appellants properly complied with the pre-action protocol, the council neither conceded the requested relief nor acted unreasonably by maintaining its assessment. The merits of the council’s position were never judicially determined. Competing arguments on the underlying claim were formidable, and the material did not make the likely winner tolerably clear.

6. Judge Stewart therefore committed no error of law or principle in exercising his discretion under rule 44.3 of the Civil Procedure Rules 1998. The Court of Appeal had no basis to intervene.

7. Jackson LJ added that, where parties settle the substantive issues but ask the court to determine costs on written submissions, the proposed order should be placed before a judge. A court official should not make such an order administratively.

1. Court of Appeal (Civil Division): The appeal was dismissed. The order making no award of costs was upheld: [2012] EWCA Civ 1795.

2. High Court, Queen’s Bench Division (Administrative Court): Following withdrawal of the judicial review claim, His Honour Judge Stewart QC determined the costs issue on written submissions and made no order as to costs.