Most practitioners know that the recovery of costs is an issue at the heart of any dispute. The Civil Procedure Rules gives extensive guidance on what is to be expected, and what (usually) is the costs position: but what happens when costs are incurred by a party to a civil matter in an arena not heard in the County Court and thus not influenced by the CPR.

Many disputes, of a civil (and thus not criminal) nature are heard daily in Magistrate’s and Crown Courts across the country. Magistrates are able to award costs pursuant to Section 64 of The Magistrates’ Courts Act 1980: on the hearing of a complaint, a magistrates’ court shall have power in its discretion to make such order as to costs – (a) on making the order for which the complaint is made, to be paid by the defendant to the complainant; (b) on dismissing the complaint, to be paid by the complainant to the defendant, as it thinks just and reasonable.

Equally, the Crown Court is able to award costs pursuant to Section 12 of the Crown Court Rules 1982, Section 12(1) ends…no party shall be entitled to recover any costs of any proceedings in the Crown Court from any other party to the proceedings except under an order of the Court. Section 12(2) states: Subject to section 4 of the Costs in Criminal Cases Act 1973(b) and to the following provisions of this Rule, the Crown Court may make such an order for costs as it thinks just.

So, if the Criminal Courts can award costs to a successful party in a dispute of a civil nature, such as Stalking Protection Orders or Sexual Offences Protection Orders, why do they often not?

R (on the application of Perinpanathan) v City of Westminster Magistrates’ Court and Another [2010] EWCA Civ 40 is the current leading authority on that very question. Perinpanathan gave guidance on the issue of costs in civil matters brought in the Crown or Magistrates’ Court by a public authority. It applied and extended the principles in City of Bradford Metropolitan DC v Booth [2000] 164 JP 485 and makes clear that the usual civil presumption that costs follow the event when the non-public party is successful does not apply, instead creating a test of reasonableness.

Why? In short, the Court accepted that a case brought by a public authority (for example the police or local authority) was deemed too far removed from a case between two independent parties. The public authority would often have a statutory duty or obligation to bring or defend such litigation and will not have the opportunities to make or receive offers of settlement that an independent party might have – all relevant factors to costs recovery under the CPR.

As stated by Lord Bingham in Booth there was a need to encourage public authorities to make and stand by reasonable and apparently sound administrative decisions made in the public interest without fear of exposure to undue financial prejudice if the decision is successfully challenged.

That rationale drew allegiance with the judgment of Roch J in the licensing case of R v Totnes Licensing Justices, ex p Chief Constable of Devon and Cornwall [1990] 156 JP 587 where it was stated that “It [is] wrong for the justices to treat this matter as civil proceedings between two private litigants and to ignore the factor urged upon them by the solicitor appearing for the police authority, namely, that the police have a function which they are required to perform”.

In Perinpanathan the correct approach to non-CPR disputes was, in short, that:

1. Where the approach applies, and the party opposing the order sought by the public authority has been successful, in relation to costs the starting point and the default position is that no order should be made.
2. A successful private party may be awarded costs if the conduct of the public authority in question justifies it.

The Perinpanathan approach therefore introduced the test of unreasonableness; if the conduct of the public authority is unreasonable, or the defence or bringing of the proceedings is unreasonable, then costs may be awarded, otherwise the default position is that no order should be made.

The guidance in Perinpanathan confirms that whether the principle should be applied in other contexts will depend on the substantive legislative framework and the applicable procedural provisions. In reality however, since Perinpanathan the courts have frequently adopted and extended the approach in all administrative matters in the Crown and Magistrates’ Courts involving a public authority.

In Bennett v Chief Constable of Merseyside [2018] EWHC 3591 (Admin), the High Court confirmed that a district judge was correct to make no order for costs against the police after it withdrew its Proceeds of Crime Act 2002 (‘POCA’) s.298 application for cash forfeiture. In considering the decision of the district judge, the High Court reaffirmed three points of principle:

• The starting point is that no order for costs should be made provided that the public authority has acted reasonably and properly.
• In determining whether the police acted reasonably and properly, the court should scrutinise the behaviour of the police with care; and
• It may be justifiable to award costs against the police, particularly where the successful private party would suffer substantial hardship if no order for costs were made in their favour. Leggatt LJ reaffirming the test set out by Lord Bingham in Booth and applied by Stanley Burton LJ inPerinpanathan, that the successful party must suffer “undue financial prejudice”, this being over and above the financial prejudice necessarily or normally incurred in litigation.

In Competition and Markets Authority v Flynn Pharma [2022] UKSC 14, the Supreme Court affirmed the validity of that approach whilst emphasising its limits. Lady Rose stated at [97] (with the agreement of the other members of the court):

“… there is no generally applicable principle that all public bodies should enjoy a protected status as parties to litigation where they lose a case which they have brought or defended in the exercise of their functions in the public interest.  The principle supported by the Booth line of cases is, rather, that where a public body is unsuccessful in proceedings, an important factor that a court or tribunal exercising an apparently unfettered discretion should take into account is the risk that there will be a chilling effect on the conduct of the public body, if costs orders are routinely made against it in those kinds of proceedings, even where the body has acted reasonably in bringing or defending the application. This does not mean that a court has to consider the point afresh each time it exercises its discretion in, for example, a case where a local authority loses a licensing appeal or every time the magistrates dismiss an application brought by the police. The assessment that, in the kinds of proceedings dealt with directly in Booth, Baxendale-Walker and Perinpanathan, there is a general risk of a chilling effect clearly applies to the kinds of proceedings in which those cases were decided and to analogous proceedings.”

A recent example of the power of Perinpanathan is the case of The Commissioner of Police of the Metropolis v Idreess Malik [2023] EWHC 3213 (Admin). This case related to proceedings under the Stalking Protection Act 2019, a civil application being heard in the Magistrates Court. At first instance, and having successfully opposed the making of an order, the magistrates made an order in favour of Mr Malik (the Respondent), in the sum of £17,487 plus VAT. On appeal, the Court were asked to consider whether, in light of Perinpanathan, such an order should stand.

Lord Justice Warby and Mrs Justice McGowan allowed the appeal and without hesitation overruled the original order in favour of no order as to costs. It was held that the well-established principles of Perinpanathan did apply and the magistrates’ starting point was wrong in law:-

[§21] “The principles identified in the Bradford case have not previously been held to apply to a case of the present kind. In our judgment, however, the Commissioner was correct to submit that they do apply. That is not because the role of the police in making an application for an SPO is akin to the administrative function of licensing with which the Bradford and Cambridge cases were concerned. Nor is there any very precise analogy to be drawn between the application in this case and the pursuit of an application under POCA of the kind considered in Perinpanathan, though the two are more closely comparable.  The reason for extending the Bradford approach to this case is the one identified in Perinpanathan: the underlying rationale applies equally. We would identify that rationale as the important public interest in ensuring that public authorities are not deterred from discharging the functions conferred upon them for fear that they will be at risk of a substantial costs order even if they act in good faith, reasonably and properly. That is a longer way of describing the “potential chilling effect” referred to by Lady Rose in Flynn Pharma”.

[§24] “We also note that the Bradford principles have been deemed applicable by judges of the Administrative Court in other cases more closely analogous to those of the present case: see Manchester City Council v Manchester Magistrates’ Court [2009] EWHC 1866 (Admin) [19] (Burton J) and Chief Constable of Warwickshire v MT [2015 EWHC 2303 (Admin) [21] (Hickinbottom J). In the first case the Council had withdrawn an application for an Anti-Social Behaviour Order. In the second the Chief Constable had withdrawn an application for a Sexual Offences Protection Order”

This judgment reaffirms the high threshold faced by successful parties seeking costs against a public body in a non-CPR yet civil dispute. The takeaway point is two-fold:

1. The guidance, rules and case law surrounding the CPR are of little to no assistance to successful litigants on the issue of costs in a non-CPR, yet civil dispute heard in the criminal courts.
2. The application of the Perinpanathan principles continue to grow, with the effect that successful litigants are highly unlikely to recover costs unless they can demonstrate unreasonableness on the part of the applicant authority.

Alexander Jones

1 January 2024

Alexander undertakes extensive work on behalf of public bodies (including police forces) on all manner of applications covered by this article. If you wish to discuss any matter with Alex, his clerks can be contacted on 0151 236 4421.