Paul Black, R (on the application of) v Secretary of State for Justice

The High Court may permit cross-court set-off between a county court damages judgment and a High Court costs order. The governing question is whether set-off is just in all the circumstances. The jurisdiction is discretionary rather than automatic. It may be exercised in proceedings that have otherwise concluded, where the court considers that approach consistent with the statutory and procedural scheme. Relevant considerations include the connection between the liabilities, the identity or substance of the parties, the outstanding nature of the costs liability, the timing and conduct of the application, and the interests of justice and the public interest.

The claimant had an unpaid High Court costs liability of £2,856 arising from a 2021 judicial review. In separate Preston County Court proceedings, the Ministry of Justice was ordered to pay him £150 in damages. The Secretary of State applied in the concluded judicial review proceedings for permission to set off the damages against the costs liability, relying on section 72 of the County Courts Act 1984 and CPR 40.13A. The claimant challenged the court’s jurisdiction, the forum and timing of the application, the connection between the liabilities, and the validity of the costs order.

1. Application granted. The court ordered that the £150 county court judgment debt be set off against the claimant’s £2,856 High Court costs liability. A copy was to be sent to the Preston County Court so that satisfaction could be entered for the sum set off.
2. CPR 40.13A(6)–(8) expressly recognises the High Court’s power to give permission for sums payable under judgments obtained respectively in the High Court and county court to be set off. Section 72(1) and (2) of the County Courts Act 1984 likewise permits either party to apply to any relevant court, with the set-off being allowed according to High Court practice.
3. The power is discretionary, not automatic. The applicable question is whether it is just in all the circumstances to permit the set-off. The court applied the broader discretionary jurisdiction identified in Fearns v Anglo-Dutch Paint & Chemical Co Limited [2010] EWHC 2366 (Ch); [2011] 1 WLR 366.
4. The jurisdiction remained available although the judicial review claim had ended. Applications relating to concluded proceedings, including applications concerning court records or reopening decisions, demonstrate that the closure of the file does not itself extinguish the court’s power. A contrary approach would undermine the utility of cross-court set-off.
5. Set-off was just. Although the proceedings were formally distinct and involved the Secretary of State and Ministry of Justice respectively, both liabilities concerned alleged illegality relating to prison correspondence and were substantively connected. It would be unjust to require payment of the damages while leaving the larger, unpaid costs liability intact. The stay obtained by the Secretary of State also meant that the period of non-payment was court-sanctioned.
6. The objections based on forum, delay, lack of connection, alleged unliquidated damages, public funding, and late service of legal materials did not alter the conclusion. The damages and costs had both been assessed by orders; the claimant had previously challenged the costs order; the application was prepared before the damages became due; and the adjournment and written response period removed any procedural unfairness.

This was a first-instance application in concluded judicial review proceedings. The judgment describes the earlier judicial review and separate county court proceedings, but no appeal from either decision.