Evans & Ors v The Serious Fraud Office

A special costs order under section 19 of the Prosecution of Offences Act 1985 should ordinarily reasonably compensate the recipient for costs actually, reasonably and properly incurred because of the identified unnecessary or improper conduct, provided the amount is reasonable and proportionate. The court must assess and specify the sum itself.

The assessment is summary and broad-brush. The judge should consider the principal issues, including both parties’ conduct, without undertaking a detailed taxation. Costs reasonably incurred in pursuing the section 19 application may themselves be recovered. Where civil costs are ordered subject to detailed assessment, an interim payment should be a cautious but reasonable estimate of the likely award, rather than merely the irreducible minimum.

Following the dismissal before arraignment of conspiracy-to-defraud proceedings against six applicants, and the subsequent refusal of the Serious Fraud Office’s application for a voluntary bill of indictment, the court had determined preliminary costs issues in [2015] EWHC 263 (QB). It found that the statutory condition for orders under section 19 of the Prosecution of Offences Act 1985 was satisfied and ordered the voluntary-bill costs to be assessed on the indemnity basis.

The remaining issues concerned the amounts payable under sections 16 and 19, the costs of the costs proceedings, and interim payments towards the voluntary-bill costs. The court also had to determine the proper method of summary assessment, including reasonable counsel and solicitor rates, the relevance of prosecutorial conduct, and the basis for estimating interim payments.

1. Costs orders made and one claim adjourned. The court assessed and ordered specified section 16 and section 19 payments, summarily assessed the costs of the costs applications, and ordered interim payments towards the voluntary-bill costs. David Whiteley’s substantive section 19 claim was adjourned for oral argument on the effect of legal aid upon counsel’s pre-existing brief fee.

2. Under section 19 of the Prosecution of Offences Act 1985 and regulation 3 of the Costs in Criminal Cases (General) Regulations 1986, the court must assess and specify the amount payable. Ordinarily, that amount should reasonably compensate the recipient for costs actually, reasonably and properly incurred because of the identified unnecessary or improper act or omission, provided the costs are reasonable in amount. Reasonableness incorporates an appropriate degree of proportionality.

3. The statutory scheme requires a summary, broad-brush assessment. The judge may adopt any fair procedure and must address the main disputed issues, but need not explain the derivation of the precise figure or undertake the item-by-item work of a taxing authority. Relevant considerations include complexity, novelty, skill, responsibility, time, place, the parties’ conduct and any observations made by the court. The paying party’s conduct remains relevant to quantum where it directly or indirectly caused additional expenditure.

4. The court’s task when assessing counsel’s fees is to determine reasonable remuneration for the work, irrespective of the charging arrangement. The proper comparator is competent counsel capable of conducting the case effectively, without assuming the exceptional fee commanded by pre-eminent reputation. Publicly funded rates are unsuitable comparators for private work, and private market rates are unsuitable for publicly funded work. On the exceptional facts, reasonable top-end hourly rates were approximately £480 for leading counsel and £240 for junior counsel.

5. The costs of pursuing a section 19 order may themselves result from the relevant unnecessary or improper conduct and may therefore be included. The court declined to determine whether a Crown Court judge could obtain assessment assistance from the National Taxing Team or Senior Court Costs Office, because no assistance was required.

6. Under the Civil Procedure Rules, an interim payment following an order for detailed assessment should be a cautious and conservative reasonable estimate of the amount likely to be recovered. It is not confined to the irreducible minimum. The later costs judge remains entirely free to reach an independent assessment.

1. High Court and Crown Court: In the present judgment, the court assessed most outstanding costs, ordered interim payments and adjourned David Whiteley’s substantive section 19 assessment.
2. High Court preliminary costs ruling: In [2015] EWHC 263 (QB), the court held that the statutory condition for section 19 costs was satisfied and that the voluntary-bill costs should be assessed on the indemnity basis.
3. High Court: In [2014] EWHC 3803 (QB), Fulford LJ refused the Serious Fraud Office’s application for a voluntary bill of indictment and remitted consequential costs matters.
4. Crown Court: In [2014] EW Misc 5 (Crown C), the conspiracy-to-defraud charge was dismissed before arraignment.