DLA Piper UK LLP v BDO LLP

A court cannot use its inherent jurisdiction to fill a legislative gap where Parliament has made specific provision for costs in one situation but omitted costs in another. A costs order against a solicitor personally requires a proper statutory or disciplinary basis, including reasonable notice and an opportunity to be heard. A solicitor who is merely representing a party is not thereby a party to the underlying proceedings. Although decisions concerning the conduct of a trial on indictment are generally excluded from judicial review, a costs order against a third-party solicitor concerning a witness-summons application may be collateral to the trial and reviewable. Where such an order is plainly erroneous, permission may be granted out of time and the order quashed. A speculative or disproportionate wasted-costs remittal should not be ordered.

DLA Piper represented Mark Woodbridge in criminal proceedings concerning alleged false accounting and conspiracy to defraud. BDO LLP, the former auditor of the relevant company, successfully resisted an application for a witness summons under the Criminal Procedure (Attendance of Witnesses) Act 1965 and the Criminal Procedure Rules 2012.

Her Honour Judge Mowat rejected BDO’s statutory costs basis but ordered DLA Piper to pay costs, relying on an inherent jurisdiction and treating DLA Piper as the applicant. DLA Piper appealed by Case Stated. The court considered the statutory costs scheme, the identity of the applicant, its appellate jurisdiction, and whether the order was reviewable despite the exclusion relating to trial on indictment.

1. The appeal by Case Stated could not proceed because DLA Piper was not a party to the witness-summons proceedings. The application was made by Mr Woodbridge, represented by DLA Piper. The costs application formed part of that application and was not a separate proceeding.

2. The 1965 Act provided for costs where a person applied to set aside a summons in the specified circumstances, but conferred no power to award costs where a person attended and successfully resisted the summons. The Rules likewise supplied no such power.

3. The inherent jurisdiction could not be invoked to fill that legislative gap. The judge had not disciplined DLA Piper for misconduct, nor made a wasted-costs order. The order was based on the erroneous view that costs should follow the event. The reasoning in Jones v Wrotham Park Settled Estates [1980] AC 74 confirmed that purposive construction remained a process of construction and could not create an entirely new statutory provision.

4. The court nevertheless had jurisdiction to entertain judicial review. Although witness-summons decisions ordinarily relate to trial on indictment, a costs order against a third-party solicitor concerning the propriety of the solicitor’s conduct was remote from the conduct and management of the trial. It was collateral to the issue between the Crown and the defendant.

5. Permission for judicial review was granted out of time because justice required the plainly erroneous order to be quashed. The matter was not remitted for a wasted-costs application. The circumstances did not justify resurrecting an unsubstantiated allegation of misconduct, and such a remittal would be disproportionate in light of the guidance in In the Matter of a Wasted Costs Order made against Joseph Hill and Company, Solicitors [2013] EWCA Crim 775.

Foskett J agreed with all aspects of Moses LJ’s judgment. The costs order was quashed. Written applications concerning costs in the judicial-review proceedings were permitted.

High Court (Administrative Court) — The court held that DLA Piper could not appeal by Case Stated because it was not a party, but reconstituted itself as a Divisional Court for judicial review, granted permission out of time, and quashed the costs order.