Darwins College Ltd v Secretary of State for the Home department

Costs following settlement of judicial review proceedings require assessment of the whole sequence of events and the parties’ conduct. A claimant does not automatically recover costs because proceedings were issued and later relief substantially similar to that sought was obtained. The court must consider whether the relief resulted from a concession that could reasonably have been made after a pre-action letter, or from an independent process already under way. The discretionary approach must not be applied mechanically. Where the first-instance costs decision rests on a material misunderstanding of the facts, the appellate court may intervene and substitute the appropriate order.

Darwins College challenged the Home Secretary’s decision to prevent a B-rated sponsor from issuing confirmations of acceptance for studies to new students. The claim was issued after the college had requested an urgent reinspection. That inspection took place before proceedings were issued, and the college was subsequently upgraded to A-rated status, making the claim academic. The claim was withdrawn by consent, with costs reserved. HHJ Pelling QC ordered the Home Secretary to pay the college’s costs. The Home Secretary appealed, contending that the upgrade resulted from an independent inspection process rather than a concession that should have been made before proceedings. The central issue was the proper exercise of discretion over costs in settled judicial review proceedings.

1. Appeal and order. The appeal was allowed unanimously. The Court of Appeal substituted an order that there be no order as to the costs below.
2. Applicable approach. In settled judicial review proceedings, the court must consider the whole sequence of events and the parties’ conduct. The principles summarised in Boxall v LB Waltham Forest [2001] 4 CCL Rep 258, and applied in Bahta [2011] EWCA Civ 895, are discretionary. The fallback, absent a good reason for another order, is no order as to costs. The approach must not discourage settlement. Compliance with the Pre-Action Protocol is relevant conduct under the Civil Procedure Rules 1998, r.44.3(5).
3. Application to the facts. The first-instance judge wrongly treated the Home Secretary’s conduct as intransigent and the subsequent upgrade as a late concession. A fresh inspection had been arranged in response to the college’s request and had taken place before proceedings were issued. The Home Secretary could not decide on an upgrade until the inspection result was available. The subsequent relief therefore did not amount to a concession that could reasonably have been made in response to the pre-action correspondence.
4. The Home Secretary was nevertheless open to criticism because the response of 17 May did not address the complaint of delay or the request for an urgent inspection. The college was also open to criticism: after the inspection had occurred, it should have sought a firm indication of when a decision would be made before issuing proceedings.
5. The first-instance discretion was undermined by a material misunderstanding of the factual sequence and the reason for settlement. The Court of Appeal was better placed to determine the appropriate order because it had the benefit of fuller oral argument and could assess the competing conduct directly.

• Court of Appeal (Civil Division) — In [2012] EWCA Civ 354 , allowed the Home Secretary’s appeal and substituted an order that there be no order as to the costs below.
• Queen’s Bench Division, Administrative Court — HHJ Pelling QC ordered the Home Secretary to pay Darwins College’s costs on the standard basis after the judicial review claim was withdrawn by consent.