Durham County Council v The Durham Company Limited

A tribunal exercising a statutory judicial-review jurisdiction cannot impose a fixed, judge-made cap on recoverable costs that is unrelated to the parties’ reasonable and proportionate costs. A derogation from the ordinary costs rule requires authority in procedural rules or legislation. The CAT may, by its case-management powers, make a CPR-style costs-capping order by analogy with CPR 3.19, but only where the cumulative conditions for such an order are met. Costs budgeting, case management and, where necessary, detailed assessment are the proper means of controlling disproportionate costs. Applying judicial-review principles to the merits of a subsidy challenge does not restrict the CAT’s procedural powers.

Max Recycle brought the first statutory judicial review under section 70 of the Subsidy Control Act 2022, challenging the Council’s alleged cross-subsidy of its trade-waste operation. Following a case management conference, the Competition Appeal Tribunal imposed recoverable-costs caps of £50,000 on Max Recycle and £60,000 on the Council: [2023] CAT 14.

The Council appealed, arguing that the CAT lacked jurisdiction to impose a limiting cap, had applied the wrong legal framework, and had acted unfairly. The central issue was whether the CAT could impose a fixed cap unrelated to actual reasonable and proportionate costs, and what alternative costs-control powers were available.

1. Appeal allowed on ground 1. The CAT President’s caps were limiting caps, imposing judge-made tariffs irrespective of the parties’ actual reasonable and proportionate costs. Such a derogation from the ordinary rule that the successful party may recover its reasonable and proportionate costs requires express authority in procedural rules or legislation. The scale-costs regime under CPR Part 46 and the CAT fast-track power under Rule 58 of the Competition Appeal Tribunal Rules 2015 illustrated the need for such authority.
2. The CAT’s case-management powers under Rules 19(2)(r) and 53(2)(m) could support a costs-capping order by analogy with CPR 3.19, as explained in Belle Lingerie v Wacoal [2022] CAT 24. Such an order is available only where the cumulative conditions in CPR 3.19(5) are satisfied: it is in the interests of justice; there is a substantial risk of disproportionate costs without the order; and that risk cannot be adequately controlled by case management or detailed assessment. The order must control the risk of disproportionate costs, not impose an arbitrary tariff.
3. In this case there was no evidence of a substantial risk that the Council would incur disproportionate costs. Costs budgeting at the case management conference could have controlled that risk. If budgeting had become impractical because the hearing was imminent, detailed assessment under Rule 104 could control costs incurred thereafter. The President gave no sufficient reason for treating budgeting as more trouble than it was worth.
4. The requirement under section 70 of the Subsidy Control Act 2022 to apply judicial-review principles concerns the substantive determination of the subsidy challenge. It does not displace the CAT’s procedural powers under its Rules. Nor was it necessary for the Corner House principles, now reflected in sections 88 to 90 of the Criminal Justice and Courts Act 2015, to be satisfied before any CAT costs-capping jurisdiction could arise. Grounds 2 to 4 did not require determination.

1. Court of Appeal (Civil Division) — Appeal from [2023] CAT 14 allowed on ground 1. The limiting costs caps were wrong in principle; the remaining grounds were unnecessary to decide.
2. Competition Appeal Tribunal — Following its judgment dated 21 March 2023, the President imposed recoverable-costs caps of £50,000 on Max Recycle and £60,000 on the Council from 17 February 2023.