Lewin, R (On the Application Of) v The Financial Reporting Council Ltd & Ors (Costs)

Costs in judicial review remain governed by the general rule that the unsuccessful party pays, but CPR 44.2 permits an order reflecting substantial success on a distinct issue. A claimant who establishes a separate public law wrong may obtain a proportionate reduction in the successful defendant’s costs, even though the principal claim and relief fail. The court must assess the issues and the parties’ actual success. A further deduction for the claimant’s own costs is discretionary and may be inappropriate where it would not fairly represent the outcome. An interested party’s separate interest and useful contribution do not, without separate arguments or an actual conflict, justify a second set of costs in judicial review proceedings.

The claimant’s judicial review challenge concerned a disciplinary tribunal report and its proposed publication by the Financial Reporting Council and its Conduct Committee. The claim raised three issues: whether the tribunal acted unlawfully, whether the Committee acted unlawfully, and what remedy should be granted.

The court dismissed the principal challenge to publication, but held that the tribunal had acted unfairly by failing to include an appropriate disclaimer in the report. The court also directed that an explanatory memorandum should accompany the electronic report. The costs hearing concerned the proper allocation of costs between the claimant, the FRC defendants and the interested parties, and whether the claimant’s success on one issue justified departure from the general rule.

1. The claimant was unsuccessful in preventing publication of the report or obtaining publication in redacted form. The agreed explanatory memorandum did not amount to a separate success warranting a costs order in his favour.
2. The finding that the tribunal had acted unfairly was a distinct and self-standing ground of public law challenge. It occupied a significant part of the hearing, required separate legal and factual determination, and was fought unsuccessfully by the FRC defendants. Under CPR 44.2(4)(b), the claimant’s partial success justified an apportionment of costs.
3. The court rejected the description of that finding as an issue decided merely along the way. It ordered the claimant to pay two-thirds of the first and second defendants’ costs, assessed on the standard basis, reflecting his success on one of the principal grounds.
4. The court accepted that a further deduction, requiring the successful parties to pay the claimant’s costs of the issue, was within the discretion recognised in F&C Alternative Investments (Holdings) Ltd v Barthelemy (No. 3). It held that such a double deduction would not fairly represent the outcome because the claimant’s substantive objective had failed.
5. The interested parties had separate interests and were entitled to separate representation. However, their arguments and evidence were substantially covered by the defendants, no actual conflict arose, and no separate arguments required promotion only on their behalf. Applying the approach in Bolton Metropolitan District Council v Secretary of State for the Environment (Practice Note), there was no order as to costs between the claimant and the interested parties.