Watson v HMCTS National Taxing Team

An authority assessing an acquitted defendant’s costs from central funds must allow a sum reasonably sufficient to compensate for properly incurred expenses. The scheme does not provide an indemnity for the costs actually incurred, including contractual solicitor rates. The authority must assess work that was actually and reasonably done and allow a reasonable amount, having regard to all relevant circumstances. A challenge to the hourly rate on Wednesbury grounds requires clear, cogent and convincing evidence that the rate allowed was irrationally low. A decision letter need not address every submission in judicial detail if, read with the surrounding correspondence, it makes clear what was accepted and rejected.

The claimant had been acquitted at Ipswich Magistrates’ Court and awarded costs from central funds under section 16 of the Prosecution of Offenders Act 1985. The National Taxing Team assessed the claim at £112,009.72, including hourly rates of between £203 and £217 for the claimant’s solicitors.

Permission for judicial review was granted only on whether it was Wednesbury unreasonable to assess the solicitors’ costs at less than £250 per hour. The claimant also argued that the contractual rate should have been considered and that inadequate reasons had been given.

1. The claim was dismissed. The National Taxing Team had not acted Wednesbury unreasonably by assessing the solicitors’ hourly rates below £250.
2. Under section 16(6) of the Prosecution of Offenders Act 1985 and regulation 7 of the Costs in Criminal Cases (General) Regulations 1986, the assessing authority must first determine what work was actually and reasonably done. It must then allow costs reasonably sufficient to compensate the applicant for properly incurred expenses. The exercise does not require an indemnity for the costs actually incurred or for the contractual rate agreed with solicitors.
3. The evidence did not establish that assessing the costs below £250 per hour was irrational. Evidence from comparable solicitors did not substantiate the claimed rate, particularly because leading counsel had been instructed and the evidence did not demonstrate that a solicitor’s mark-up was appropriate. The evidence therefore fell substantially short of the clear, cogent and convincing evidence contemplated when permission was granted.
4. The contractual rate ground had not formed part of the permitted ground of challenge and, in any event, had no merit. The decision letter showed that the authority had considered the relationship between the claimant and his solicitors, while assessing only the reasonable cost of work done.
5. A decision-maker need not address every point with the detail expected of a judicial judgment. It is sufficient that the decision, read with the correspondence as a whole, enables the recipient to understand what was accepted and rejected. That requirement was satisfied.
6. The defendant was awarded its costs of the application, summarily assessed at £4,700.67.

Permission for judicial review was refused on paper but granted orally by Richards LJ and Collins J on 22 May 2012 on the limited hourly-rate ground. The Divisional Court dismissed the claim.