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Cost Orders in Public Law Proceedings: A New Approach?

Does the general rule of ‘no order as to costs’ still apply in public law Children proceedings? Harry Nosworthy reviews recent judgments which suggest that the courts are now readier to make costs orders.

Harry Nosworthy, Pupil Barrister, 4 Paper Buildings

As a general rule in Children Act 1989 proceedings no order is made as to costs save where a party has behaved unreasonably or reprehensibly in relation to the litigation conduct. The courts have historically not wanted the threat of costs to discourage parties from making appropriate applications in relation to children, especially so in care proceedings. The guidance on the court's approach to cost orders in public law Children Act proceedings is limited. However, recent decisions have perhaps indicated that the courts are now more willing to exercise their broad discretion to make orders.

This article will seek to examine:

(a) The law relating to costs in care proceedings under the new Family Procedure Rules 2010;

(b) Whether recent authorities  have set down guidelines which are to be applied by the courts or whether each case will turn on its facts;

(c) Whether costs in care proceedings could become a more common occurrence.

The law relating to costs in care proceedings
The rules governing costs in family proceedings are found in Part 28 of the Family Procedure Rules 2010. These replicate the old provisions in rule 10.27 of the Family Proceedings Rules 1991, with two small additions:

(a) All rules are applied having regard to the overriding objective at Part 1 of the FPR 2010; and

(b) Rule 28.1 contains an express provision that 'the court may at any time make such order as to costs as it thinks just.'

However, this has not brought about a significant change and the principal purpose of rule 28 is to apply the cost provisions in Parts 43, 44, 47 and 48 of the Civil Procedure Rules 1998, subject to the exclusion of rule 44.3(2) which provides that 'if the court decides to make an order about costs, (a) the general rule is that the unsuccessful party will pay, but (b) the court may make a different order.'

In most cases under the Children Act 1989 the court will make no order as to costs. The basis for this has long been recognised in the family courts and is appropriately summarised by Wilson J as he then was in Sutton London Borough Council v Davis [1994] 2 FLR 569:

Where the debate surrounds the future of a child, the proceedings are partly inquisitorial and the aspiration is that in their outcome the child is the winner and indeed the only winner. The court does not wish the spectre of an order for costs to discourage those with a proper interest in the child from participating in the debate. Nor does it wish to reduce the chance of their co-operation around the future life of the child by casting one as the successful party entitled to his costs and another as the unsuccessful party obliged to pay them. The proposition applies in its fullest form to proceedings between parents and other relations; but is also applies to proceedings to which a local authority is a party. Thus, even when a local authority's application for a care order is dismissed, it is unusual to order them to pay the costs of the other parties. But the proposition is not applied where, for example, the conduct of a party has been reprehensible or the party's stance has been beyond the band of what is reasonable.

The approach of Cazalet J in Re M (Local Authority's Costs) 1 FLR [1995] 533 has also provided the courts in the past with some limited guidance as to how the courts can exercise its discretion in making costs orders: 

Although it was not a proposition, in child cases it was unusual to make an order for costs where the conduct of a party had not been reprehensible or the party's stance had not been beyond the band of what was reasonable. It was a matter for the discretion of the court in the light of those criteria as to what order for costs should be made.

Conduct which is reprehensible or beyond the band of what is reasonable
This was the test applied by HHJ Bellamy sitting as a judge of the High Court in Coventry City Council v  X, Y and Z (care proceedings: costs) [2011] 1 FLR 1045 when he awarded parents £50,000 each towards settlement of their costs, funded by the Legal Services Commission under high costs contracts, in failed care proceedings. The local authority issued applications for care orders in respect of three children due to concerns of neglect and fabricated or induced illness (FII). A fact finding hearing was listed but the local authority made an application for leave to withdraw the proceedings with respect to two of the children and to continue with respect to the remaining child, despite making applications for interim care orders within the last 6 months. The parents' and the children's costs were estimated at just short of £400,000. The local authority had failed to satisfy the court that this was a true FII case, because it simply had not investigated the issue in depth, despite having the benefit of an assessment by an independent social worker, the children's guardian and a consultant paediatrician. HHJ Bellamy found that the local authority's conduct had fallen outside the band of what is reasonable and ordered it to pay £100,000 towards the parent's costs.

Whether such orders will be enforced by the Legal Services Commission is a separate matter and one that may be thrashed out between publicly funded bodies, as HHJ Bellamy made clear in his judgment, echoing the sentiments of Charles J in Re R (Care: Disclosure: Nature of Proceedings) [2002] 1 FLR 755 where having made an order for costs against the local authority he said that:

I would also express the view, which can be conveyed, for what it is worth, to the Legal Services Commission that this is an issue between publicly funded bodies. They may, as a matter of discretion, wish to take that into account in deciding whether or not they enforce this order having regard to the circumstances of the case and the way in which legal aid is granted in family proceedings.     

Costs in fact finding hearings and the 'clean sheet' principle
Despite the principles set out in these authorities, there have been a number of recent decisions which would indicate that the courts are adopting a new approach to the issue of litigation conduct and costs in fact finding hearings, and dispensing with established propositions.

In Re J (Costs of Fact Finding Hearing) [2009] EWCA Civ 1350, [2010] 1 FLR 1893, the Court of Appeal (Ward and Wilson LJJ) suggested that the principle in Sutton did not apply to the costs of a fact finding hearing. In private law proceedings the mother alleged domestic violence against the father. The district judge found 11 of the 17 allegations proved. The mother applied for her costs of the hearing but her application was dismissed by the district judge and circuit judge on appeal. The Court of Appeal in allowing the mother's appeal, said at [17]:

The effect of the direction for a separate fact finding hearing was that the costs incurred by the mother in relation to that hearing can confidently be seen to be wholly referable to her allegations against the father. There was, in that sense, a ring fence around that hearing, and thus around the costs referable to it. Those costs did not relate to the paradigm situation in which the general proposition in favour of no order as to costs applies.

This would suggest that where there is a discrete issue to be determined the courts will ring fence it when dealing with costs. However, Wilson LJ went on to explain that such situations were limited:

I would be concerned if our exercise of discretion in relation to the mother's costs in this case today were to be taken as an indication that it was appropriate in the vast run of those cases to make an order for costs in whole or in part by reference to the court's determination of issues of historical fact [18]

In Re T (A child) [2010] EWCA Civ 1585 the Court of Appeal went a step further. The court was concerned with lengthy care proceedings involving allegations of cross-generational sexual abuse to which the paternal grandparents of the subject children were joined as alleged perpetrators. The grandparents did not qualify for public funding and had to borrow over £50,000 to pay for legal representation. At the conclusion of the fact finding hearing, in which they were completely exonerated, their application for an order for costs against the local authority was refused and they appealed to the Court of Appeal. In determining the appeal, Wilson LJ said:

It was common ground that it was appropriate for the local authority to invite the court to determine the allegations against the grandparents and that the way in which the local authority conducted themselves during that hearing cannot be criticised [8].

The trial judge had applied the general proposition in favour of no order as to costs. The Court of Appeal found that the judge had erred in relying on this principle and that where allegations have not been established in a fact-finding hearing the general rule 'no order as to costs' is not in play. Wilson LJ said that:

It does not, however, follow that the Judge should automatically have ordered the local authority to pay the costs of the grandparents. The general rule that costs should follow the event did not apply. Nor however did the general proposition that there should be no order for costs in proceedings relating to children. In truth the Judge should have started with a clean sheet [19].

Wilson LJ helpfully provided further guidance as to the proper determination of such applications by referring to his decision in Baker v Rowe [2009] EWCA Civ 1162, [2010] 1 FCR 413 and said:

Even where the Judge starts with a clean sheet, the fact that one party has been unsuccessful and must therefore usually be regarded as responsible for the generation of the successful party's costs, will often properly count as the decisive factor in the exercise of the Judge's discretion [25].

Accordingly, with this dictum in mind it was ordered that the local authority should pay the costs of the grandparents of and incidental to their intervention on the standard basis.

It is understood that the local authority has obtained permission to appeal the decision in Re T in the Supreme Court but this is not likely to be heard until next year.

How do the courts apply the 'clean sheet' principle?
In the case of Kent County Council v A Mother [2011] EWHC 402 (Fam) the court was concerned with allegations of sexual abuse which the mother had allowed to happen by permitting the children to stay overnight with a family friend who was a sex offender. The court found that the children had suffered significant harm by virtue of the unreasonable parental care she gave them. However, the mother, the father, the children through their guardian, and the intervenor (mother's current partner) all made applications for costs against the local authority on the basis of a failure to carry out duties as to disclosure, which Baker J described as being conducted in 'a wholly unsatisfactory, piecemeal and haphazard' way. The local authority's unorthodox approach to disclosure led to the other parties incurring extra costs in managing the information.

Baker J found that the local authority's failure to disclose was manifestly unreasonable, and in applying the test in Sutton, he found it right for the local authority to bear the costs thereby incurred by the respondents under their public funding certificates. However, the judge also made clear that the court must be careful that the costs penalty imposed on the local authority is fair. Accordingly, Baker J took a simplistic approach and worked out roughly how many extra days to the hearing were incurred as a result of the local authority's failings. He did not think it proportionate to embark upon a more detailed assessment process given that all costs were being borne by the public purse.

The intervenor's application for costs was a different matter. The intervenor was exonerated in the fact finding hearing and sought to apply the Court of Appeal Re T 'clean sheet' principle and, as the successful party, sought costs from the local authority. However, it was not the local authority but rather the father who sought findings against the intervenor after the late disclosure of the material. When the court then decided that these matters should be investigated, the local authority took the lead. Baker J, therefore, decided that it would not be right to order the local authority to pay the costs of the intervenor, and he adopted the words of Wilson LJ from Sutton that the local authority was participating in the court process as one would expect of a local authority with a proper interest in the children who were the subject of the proceedings and there should be no order as to costs. Furthermore, Baker J suggested that where the court takes the lead in identifying the issues to be litigated at a fact finding hearing, it will generally be inappropriate to depart from the general proposition of no order as to costs in family cases.   

Baker J considered whether such an order was in accordance with the overriding objectives set out in Part 11 of the Family Procedure Rules 2010, and the express requirement at rule 28.1 that a 'just order' as to costs should be made. He further acknowledged that such an order would pose a significant burden upon the local authority especially in time of economic strife and accordingly the order was not as great as it could have been.

Compliance with active case management directions
It is worthy of note that in care proceedings when local authorities are making applications they are often held responsible for case management, and it is not an unknown occurrence for the courts to put local authorities on notice to show cause why they should not paid any costs wasted as a result of care management failings.

It is important to highlight that the 'Basic guidance to good practice in care proceedings across London' by DJ Harper and approved by HHJ Altman October 2010 provides very clear assistance as to the responsibility of the parties to ensure proper case management. 

Paragraphs 26-29:

26. It is the responsibility of the parties to adhere to the timetable the court has set for the child. This enables the court to ensure the case is dealt with justly under the overriding objective. A failure by the parties to enable the active case management of the case may jeopardise the timetable for the child and cause unnecessary delay in the proceedings.

27. It is the responsibility of the parties to bring to the attention of the court any material departure from case management directions jeopardising the timetable for the child set by the court.

28. Active case management includes encouraging the parties to cooperate with each other in the conduct of the proceedings.

29. It is the responsibility of the parties to speedily address and seek to remedy by agreement between themselves any difficulties that arise in compliance with case management directions, in such a way that the timetable for the child set by the court can be maintained and not jeopardised.    
The guidance makes clear that it is the responsibility of the parties to ensure compliance with case management directions. All too often this is overlooked and the local authority is held accountable for failing to comply with the directions, for example as to police disclosure, when the responsibility in ensuring compliance rests with all the parties. The other parties have a responsibility to alert the local authority of any failings if they are apparent and actively seek to remedy the difficulties, and if they are unable to do so then alert the court that the timetable for the child may be jeopardised. However, far too often the issue is ignored and the local authority left to bear the burden and take sole responsibility.

These recent decisions seem to indicate that the general rule 'no order as to costs' no longer applies to fact finding cases, and the courts will start with a 'clean sheet' where the local authority has sought findings and the court does not make them. It is also clear that where one party has been unsuccessful and consequently generated the costs of the successful party this will be a pivotal factor for the court in making a cost order.

However, it would appear from Baker J's judgment that the dicta of Wilson J in Sutton remain good law. Where a local authority is participating in the court process with a proper interest in the children who are the subject of the proceedings it would be inappropriate to depart from the general rule no order as to costs, in contrast to views expressed by the Court of Appeal on the facts in Re T. This demonstrates that the courts have a broad discretion in how they deal with costs in the public law sphere and each case will turn on its facts.

Outside the parameters of the fact finding hearing the courts, whilst adopting a robust approach, remain guided by the principles in Sutton and the general rule remains that there should be no order as to costs save where a party has behaved unreasonably or reprehensibly. However, what is clear is that the courts are prepared to take a hardy view in finding that a party's behaviour has been unreasonable or reprehensible. The decisions in Re X, Y, Z and Kent CC provide a stark reminder to local authorities that ill thought case management and poor preparation will be penalised with cost orders.