In Shahi v Secretary of State for the Home Department [2021] EWCA Civ 1676 (16 November 2021) (‘Shahi’), the Court of Appeal considered whether it was suitable to enable the Appellant to recover their costs in judicial review following a grant of interim relief.

The payment of legal costs is centred around the concept that costs generally ‘follow the event’ and therefore any successful party can generally expect to be awarded costs, e.g. see Kastor Navigation v Axa Global Risks [2004] 2 Lloyd’s Rep 119 and CPR 44.2(2)(a). However, pursuant to CPR 44.2, the Court has a general discretion on costs, including whether costs are payable by one party to another (CPR 44.2(1)(a)), the amount of those costs (CPR 44.1(b)) and when said costs are to be paid (CPR 44.1(c)), thus providing the Court with flexibility in making PD44 para 4.2 orders (e.g. costs in the case/costs in the application).

Costs in Judicial Review: The Rules

Judicial Review is a type of public law proceeding and is a process in which the Court examines decisions made by public bodies. Judicial reviews are dealt with by the Administrative Court, which is part of the High Court.

Applying for a Judicial Review encompasses pre-action work and making the Judicial Review application for permission. At this permission stage a court must be convinced that the case has a reasonable prospect of success. If permissions is refused at the initial request then the application must be renewed at an oral hearing and once permission is granted preparation for the full Judicial Hearing can commence.

The general rule of thumb for costs in judicial review is that costs cannot be recovered if the case settles within the Pre-Action protocol stage. Legal aid is available for many judicial review cases to aid access to justice.

The Court has discretion to order costs in Judicial review cases, and this discretion includes:

The extent of the court’s discretion includes:

1. Whether or not costs are payable by one party to another;
2. The amount of costs payable – (proportionate costs are usually allowed);
3. When the costs should be paid. 

Costs in Judicial Review cases may be recovered from the losing party in the event that costs are awarded by the Courts via an inter-partes costs order. The costs order will usually state that “the Defendant do pay the Claimant’s costs, to be assessed failing agreement”. 

If a Claimant to a case is unsuccessful, they may be ordered to pay the costs and court fees of the Defendant and all other interested parties, including costs of the pre-permission stage. In the case of CPRE Kent v Secretary of State for Communities and Local Government [2021] UKSC 36 it was confirmed that an unsuccessful Claimant may be required to pay multiple sets of costs at the permission stage.

In these types of cases, matters are often funded by way of private retainer or Legal Aid, and the agreement with the Legal Aid Agency acts as the retainer in the case (in place of a CFA or private agreement for instance), and entitles the Claimant solicitors to claim their costs from the other side. 

Shahi v Secretary of State

Shahi was a Judicial Review claim seeking interim relief, but this was rendered academic prior to the service of the Acknowledgement of Service, following the DWP/local housing authority approving universal credit payments/accommodation in line with an order of the Court following an ex parte application.

The Respondent averred that the Appellant had partly achieved what it had set out to achieve, owing to the actions of outside forces; and therefore, without the lawfulness of the decision in question having been conceded, ordinarily there should be no order for costs, the consent order simply reflecting the correct approach on the balance of convenience. The Appellant maintained that they were entitled to their costs incurred in line with orthodox cost principles and similar judicial decisions.

In surveying the authorities, the Court reaffirmed M v Croydon London Borough Council [2012] EWCA (Civ) 595 in that the successful party is entitled payment of costs as a matter of civil procedure (e.g. CPR 44.3(2) where costs are subject to detailed assessment. However, it was notably also made clear in M at paragraph 59 that the position on costs is more nuanced where a party is partially successful, as the Respondent was arguing. Equally, where it is difficult to discern precisely who the winner is, as was the case in R (Naureen) Salford City Council [2012] EWCA (Civ) 1795, a ‘no order as to costs’ determination may be appropriate.

The Appellant sought to argue that it had, in effect, primarily been seeking interim relief, therefore it was evidently a successful party. The Respondent averred that the lawfulness of the decision was the principle dispute, not solely the provision of interim relief.

At paragraph 66, the Court considered the core of these arguments around four key questions. The determinations may be summarised as follows:

I) What was in dispute in the JR application? – The essential core of the claim was the contention that the Secretary of State had acted unlawfully, thus it was not solely about interim relief.

II) What did the Court decide that dispute in granting interim relief? – It was considered that the Court had not determined the underlying dispute and that, in line with Naureen, the grant of interim relief was not a reason for giving the Appellant the costs of the action.

III) What was settled by the Consent Order reached? – The consent Order acknowledged the granting of interim relief but did not address the decision under challenge. For the purposes of M the making of any costs orders was not considered appropriate.

IV) Which party was successful for the purposes of CPR 44.3(2)? – The granting of interim relief was not a determination and equally speculation was not a determination.

It was thus determined that the grant of interim relief by the DWP/local housing authority, regardless of whether these acts could have been foreseen, was not indicative of the success of the Appellant in the judicial review claim. The substantive of that matter had not been determined on the facts. The No Order as to Costs determination therefore subsisted with the appeal dismissed.

How can ARC Costs Assist?

If you require any free initial advice, or our assistance with regards to any aspect of your costs in judicial review proceedings, please do not hesitate to contact us and one of the team will get in touch on the same working day.

Due to the complex nature of these types of cases, we would always recommend that you employ a legal costs expert to assist with your matter. 

We can provide assistance with anything relating to your legal costs claim, whether it be preparing a Costs Budget, to preparing the Bill of Costs and negotiating recovery of your outstanding fees. Our Costs Lawyers can also represent you at an oral hearing.

If you have a costs query upon you require some initial free advice, please contact the team by phone on 01204 397302 or email us at info@arccosts.co.uk.

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