The case of Damian Ferko v. Ealing Magistrates Court and Others (2024) is a significant matter concerning private prosecution costs presented to individuals initiating such proceedings.  The case highlights the tension between the right to pursue private prosecution and the financial and procedural barriers that can arise in the process, particularly regarding costs orders under the Prosecution of Offences Act 1985.

Damian Ferko v. Ealing Magistrates Court and Others

The case of Damian Ferko v. Ealing Magistrates Court and Others (2024) EWHC 3297 Admin involved an appeal relating to statutory nuisance claims under the Environmental Protection Act 1990. Mr. Ferko, a tenant, alleged that persistent damp and mould in his rental property constituted a statutory nuisance.

Initially, the Magistrates’ Court dismissed his claim, citing insufficient evidence to hold the landlords responsible. However, Mr Ferko appealed and the High Court overturned this decision, citing several critical legal errors by the Magistrates.

Costs Orders to Consider

Two existing costs orders were relevant for consideration on the day:

1. That the Respondents collectively pay 75% of the Appellant’s costs related to the application to amend the case stated.

2. That the Respondents pay the Appellant’s costs of the substantive appeal.

No apportionment of costs was specified between the Respondents. Although there were potential differences in the prosecution’s approach regarding the Second Respondent, though the grounds for submissions of no case to answer were substantially the same for all Respondents. Most questions in the case stated applied equally to all Respondents. Since neither party raised the issue of apportionment, it was appropriate that the costs orders remain against all Respondents collectively.

Assessment of Costs

The Appellant and Receiving Party sought for their costs to be summarily assessed, with schedules filed totalling £16,902 for the amendment aspect of the costs order, and £37,717 for the substantive appeal.

The Respondents/Paying Parties sought for an order for detailed assessment.

Ultimately the assessing Judge decided it was appropriate to summarily assess costs there and then, given the High Court was familiar with the appeal, and further costs would arise proceeding to detailed assessment otherwise.

In assessing costs, the Court highlighted in the judgment that only reasonable and proportionate costs are allowed, as per CPR 44.3. Costs were being assessed on the standard basis, resolving doubts in favour of the Paying Party. Factors considered included the sums in issue, complexity, conduct, and public importance of the case.

Mr Justice Sweeting stated, “While reliance on a Grade A fee earner for significant portions of the work may have been justified in principle, excessive reliance on such expertise for routine tasks suggests inflated costs. For instance, many tasks could have been handled by a Grade C fee earner, Mr. Raza, who was underutilised.”

“Regarding Counsel’s fees, while they were appropriately reduced for the initial hearing, the total claimed remains high. Fees aggregating over £8,000 for preparation and over £18,000 for substantive work appear disproportionate, even accounting for the complexity and value of the case.”

Conclusion of Summary Assessment and Comments on Proportionality

To reflect the findings in the assessment, percentage reductions were made to the costs claimed. The total for the application to amend was reduced by 20% to £13,521.60, with the Appellant entitled to 75% of this amount under the existing order (£10,141.20). The total for the substantive appeal was also reduced by one-third to £24,893.22.

Of particular importance in relation to assessment proceedings in other inter-partes disputes, were the comments which the judge expressed in the closing statement. “Proportionality is not simply about reducing costs to the lowest possible figure. The court must strike a balance between ensuring that the receiving party is properly compensated for their reasonable costs and protecting the paying party from excessive and disproportionate costs. However, the court should not endorse disproportionate or unreasonable costs and must ensure that the final figure is reasonable and proportionate, even in the absence of challenges to individual items.”

Ensuring Proportionality in Private Prosecution Costs Claims and Inter Partes Costs Orders

Ensuring proportionality in inter-partes disputes is crucial to prevent abuse of the legal system and protect the rights of both the Receiving Party (private prosecutor in the subject proceedings) and the Paying Party (Defendant/Respondents).

When seeking an assessment of costs, the Receiving Party should provide detailed, transparent breakdowns of costs (N260s for summary assessment at any hearing, filed atleast 24 hours prior for any application hearing, and 2 days prior for any final hearing) that clearly outline the legal work undertaken, the time spent, and the costs incurred. This allows both parties and the court to assess the appropriateness of the charges. 

If a detailed assessment is taking place, the Receiving Party must following the Bill of Costs and Notice of Commencement process to commence proceedings.

Costs Lawyers can assist a Receiving Party by providing accurate quantification of your costs/realistic estimates of the likely future costs of a case (for instance when preparing Costs Budgets), helping to avoid unpleasant surprises later on as part of any assessment process. This includes advising on the potential financial implications at each stage of the litigation process.

Recoverable costs must be reasonable and proportionate to the seriousness of the issue (or offense/appeal issues in private prosecution cases) and the complexity of the case. This includes avoiding overcharging for simple cases or charging excessive fees for administrative tasks.  Simply because a Solicitor/Barrister charges a client a fee, does not mean it is considered reasonable/proportionate in an inter-partes assessment.

Instruction of a legal costs professional, such as a regulated Costs Lawyer, is always recommended when it comes to the ever increasing complex area of costs law.  Costs Lawyers can review the invoices submitted by legal professionals and maximise the likely recovery of any legal fees paid.

How can ARC Costs Assist?

ARC Costs are an experienced and independent team of specialised Costs Draftsmen and Costs Lawyers. Our costs team are highly experienced as independent experts in the opposition or recovery of costs. With regards to costs of a private prosecution, we can assist in ensuring that the costs involved are proportionate to the case.

As independent experts, we can assist either Paying or Receiving parties in resolving costs disputes, and we are adept at preparing Costs Budgets and Bill of Costs for receiving parties, as well as providing legal costs negotiations services and preparing Points of Reply.

Similarly if instructed by the Paying Party, we are adept at settling Points of Dispute, and conducting negotiations to reduce your exposure to legal costs.

If you would like more information on any of our services or wish to speak to a member of our expert costs team about your case then please do not hesitate to contact us. Please call one of our independent experts at 01204 397302, or email one of our costs experts direct on info@arccosts.co.uk.

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