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B, Re (Costs Order) [2005] EWCA Civ 779

Assessment of costs where the paying party is publicly funded for part but not all of the proceedings.

B, Re (Costs Order) [2005] EWCA Civ 779

Court of Appeal: Thorpe and Latham LJJ and Toulson J (26 May 2005)

Summary
Assessment of costs where the paying party is publicly funded for part but not all of the proceedings.

Background
By a costs order made in September 2001, relating to proceedings under section 8 of the Children Act 1989, a husband was required to pay the wife's costs, and the reasonable amount for him to pay was to be determined on application by the wife. At the date of the costs order, both parties were publicly funded; however, the husband had been publicly funded only for the latter part of the proceedings.

For various reasons, the wife was slow in taking steps to enforce the costs order; as a result, she was adjudged, at first instance, to be out of time under the relevant regulations as regards the period for which the husband was publicly funded. However, the judge did not accept the husband's argument that the wife had lost the right to proceed with the assessment of her bill for the period when the husband was not publicly funded: the fact that she was no longer able to seek to recover from the applicant any costs incurred after the relevant date in no way impeded her entitlement to seek to recover the costs incurred before that date.

The husband, acting in person, appealed, relying principally on the wording of the Costs Practice Direction, the relevant provisions of which suggested that, where a bill covered a period for which the paying party was partly, but only partly, publicly funded, the whole assessment was to be carried out under the mechanism applicable to publicly funded claims. The court considered painstakingly the relevant statutory provisions, namely: section 11 of the Administration of Justice Act 1999 (AJA 1999), the Community Legal Service (Costs) Regulations 2000 (CLS Costs Regs), Parts 43 to 48 of the Civil Procedure Rules 1998 (CPR) (as applied to family proceedings by the Family Proceedings (Costs) Rules 1991, as amended), and the Costs Practice Direction.

Judgment
Held, dismissing the appeal, that it was clear from the wording of AJA 1999, s 11 that, where a person was publicly funded for part of the proceedings, but not the whole proceedings, the provisions of the section applied only to the part of the proceedings for which he was funded. Accordingly, the wife was entitled to recover costs for the period when the husband was not funded. Further, it has been emphasised most recently in KU (A Child) v Liverpool City Council [2005] EWCA Civ 475 that a practice direction has no legislative force.

The court gave a useful summary, reaffirming that the regime under CPR Parts 44 to 48, for assessing costs generally, and the regime under AJA 1999, s 11 and the CLS Costs Regs, for assessing costs payable by publicly funded clients, are mutually exclusive. Where a client has been publicly funded for part but not all of the proceedings, the fact that the rules provide separate regimes with different procedural provisions for the assessment of costs for the different periods may sound more complicated in theory than it should be in practice: proceedings for a detailed assessment of costs under CPR Part 47 in respect of the unfunded period and for a determination of costs payable under AJA 1999, s 11 in respect of the publicly funded period can and should sensibly be started simultaneously and dealt with together by the costs judge. The receiving party must break down the costs into the two periods, but this can be done in a single bill of costs divided into different parts.

Comment by Tacey Cronin, Albion Chambers

The very long established convention is that costs orders are not made in cases concerning children unless there is something exceptional about the circumstances or conduct of the case: the general rule is disapplied in family proceedings (FPR 10.27 (1)(b)). There have been notorious exceptions – see Al Khatib v Masry [2005] 1 FLR 381, where the wife's award in ancillary relief included an additional £2.5 million in anticipation of her having to fund protracted proceedings. However, at a more ordinary level it may be the use of costs orders increases as the availability of public funding reduces. The enforcement of such orders has always been difficult – the effect seen as akin to turning the knife in the wound left by the primary decision on contact or residence. In fact, where resources are limited and all the proceedings have had to be conducted under the same public funding certificate, the need for costs orders is likely to be greater and, as this case demonstrates, there is no point in an order unless it can be enforced. The trigger here, of course, is the fact that the husband was not publicly funded throughout.

Read the full text of the judgment here