The issue of costs in immigration cases continues to vex the courts. It is supposed to be unusual for the higher courts to have to deal with costs issues but in recent years we have seen some very low quality and controversial costs decisions at first instance in the Administrative Court and the Upper Tribunal. The Court of Appeal has had to intervene repeatedly. Typically the overturned first instance decisions have been to the detriment of publicly funded claimant lawyers assisting clients with cases against the Government.

A particular issue which has recurred in the Upper Tribunal is what decision on costs should be made where a decision is withdrawn by the Home Office but remade with the same ultimate outcome. I have referred to this here on Free Movement as the Problem Of The Moving Goalposts, for example in this blog post:

The latest contribution to the considerable canon of costs cases is R (Tesfay) v Secretary of State for the Home Department [2016] EWCA Civ 415.

Background

The subject matter of Tesfay is the vast number of judicial reviews against third country removal to other EU countries stacked behind the lead cases. The lead cases succeeded in the Supreme Court case of EM (Eritrea) v Secretary of State for the Home Department [2014] UKSC 12. It having been established that the Home Office acted unlawfully and with the Home Office in consequence withdrawing all relevant decisions, one might have thought that costs would be awarded to the successful parties in accordance with the normal rule. As a reminder, CPR 44.2(2) provides:

If the court decides to make an order about costs

(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but

(b) the court may make a different order.

CPR r 44.2 (4) provides:

In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including

(a) the conduct of all the parties;

(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and

(c) any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply.

Nevertheless, the judge in the lead costs case that followed, Collins J, made no order for costs for any work done after permission was granted on the stacked cases. The justification was that ultimate success was improbable in the cases, in the sense that the claimants would probably not have been able to resist removal to the relevant third country. This decision basically disallowed the vast majority of work done on such cases and meant that:

(a) the legal aid fund rather than the Home Office had to bear those costs even though the Home Office acted unlawfully and

(b) the claimant lawyers got paid at artificially low legal aid rates rather than the true cost of the work undertaken.

Giving the leading judgment, Lloyd Jones LJ refers to the recommendation in the Jackson review on costs that if the defendant settles a judicial review claim after issue by conceding any material part of the relief sought and the claimant has complied with the protocol, the normal order should be that the defendant pays the claimant’s costs. Lloyd Jones LJ then recites the recent case law on costs, including Bahta [2011] EWCA Civ 895, M v Croydon [2012] EWCA Civ 595, Emezie [2013] EWCA Civ 733, R (TH) v East Sussex CC [2013] EWCA Civ 1027, the remarks of Lord Hope in R (E) v JFS Governing Body [2009] UKSC 1 on the impact of non award of costs on the remuneration of legally aided lawyers and Hunt v North Somerset Council [2015] UKSC 51.

In this last case, Hunt, the Court of Appeal held that the defendant had acted unlawfully but declined to quash the decision as it was too late and did not grant declaratory relief. The defendant was nevertheless considered the successful party for the purpose of costs. The Supreme Court disagreed and Lord Toulson JSC held:

If a party who has been given leave to bring a judicial review claim succeeds in establishing after fully contested proceedings that the defendant acted unlawfully, some good reason would have to be shown why he should not recover his reasonable costs.

Lloyd Jones LJ then moves on to consider in detail the procedural history of the linked cases under consideration. He observes that in all of the cases, the Home Office had relied on a Court of Appeal judgment which was later overturned by the Supreme Court. The decisions in the cases were then withdrawn on the basis of the Supreme Court decision.

What counts as success in public law litigation?

At paragraph 57 Lloyd Jones LJ addresses the central dilemma in this and other similar cases:

At the heart of this dispute as to costs lies the question of what should be considered a success in public law litigation. Whereas in a settlement of private law litigation it is usually possible to identify with some precision the extent to which a party has been vindicated, the position following compromise of public law litigation is often not so clear cut. Proceedings for judicial review are brought by persons dissatisfied with decisions of public bodies. However, the courts are not the decision makers and often in public law the most that can be achieved is an order that the decision maker reconsider on a correct legal basis. That may not lead to ultimate victory for the applicant because the new decision may be a lawful decision against the interests of the applicant. Nevertheless, to achieve an order for reconsideration will often be a substantial achievement. Success in public law proceedings must be assessed not only by reference to what was sought and the basis on which it was sought and on which it was opposed, but also by reference to what was achievable.

In these particular cases, the grounds of the claimants had ultimately been vindicated by the Supreme Court in EM (Eritrea). The claimants had sought quashing of the decisions in their cases and a stay on removal. This they had achieved, in that the decisions had been withdrawn. Some had also sought mandatory orders which had not been achieved.

The court held that the most the claimants could realistically have achieved was a quashing order, given that the court was not the decision maker. The claimants had therefore achieved success and the normal rule was that they should therefore recover their costs unless there was good reason to the contrary.

In so finding, the court makes crystal clear that achieving quashing or withdrawal of a decision under challenge will normally be considered a success and will normally therefore lead to an award of costs to the claimant. Failure to achieve a mandatory order as well as a quashing order does not mean that success has not been achieved.

What might be a good reason not to award costs to a winner?

Non compliance with the pre action protocol might be justification for not awarding costs where compliance might have avoided the need for litigation in the first place. That did not arise in this case as (a) there was no time to comply with the protocol, (b) it was Home Office policy not to defer removal unless proceedings were initiated and (c) in any event the Home Office would not have compromised.

The Home Office tried to argue that the legal position of the Home Office was broadly consistent with the outcome of the EM (Eritrea) litigation and that the position adopted by the Court of Appeal was not actually one which was advanced by the Home Office. It was therefore unfair for the Home Office to pay costs. Lloyd Jones LJ rejects these submissions.

He then moves on to an interesting and recurring costs issue in modern immigration judicial review. If a claimant succeeds in getting a decision withdrawn but a new adverse decision is made, should the claimant stick or twist?

Stick or twist?

In an interesting passage of the judgment, Lloyd Jones LJ refers to the submission of Stephen Knafler QC on the dilemma faced by a public law litigant who succeeds in achieving quashing or withdrawal of a decision but who faces another decision with the same outcome but different reasons:

In public law litigation securing reconsideration of a decision which is challenged is usually considered a success for costs purposes. The fact that following reconsideration a decision may be taken which is against the interests of the applicant is not a reason for refusing costs on the judicial review. As Mr. Knafler put it, in a striking figure of speech, the applicant faced with a new decision against him may thereafter “stick or twist”. The applicant may accept that he cannot challenge the new decision and simply seek his costs of the judicial review. Alternatively, he may challenge the new decision. The fact that he follows the latter course should not normally affect the costs of securing the reconsideration.

The Home Office also attempted to argue that in claims such as these, which were “rolling” or “evolving” claims where new decisions are issued in the course of proceedings without old decisions necessarily being withdrawn, the focus when deciding costs should be on the most up to date decision. Of course, the most up to date decision is more likely to be a lawful one because it can be re-drafted in response to the claim and in response to any case law developments.

On this issue, no clear guidance is given by the court. It is said, though, that what should normally happen is that an unlawful decision should be withdrawn and a new decision issued by the defendant, meaning that new proceedings should be brought if the claimant is dissatisfied with the new decision. This was what had occurred in the particular cases before the court.

Lloyd Jones LJ does say that if new decisions had been made without withdrawal of earlier decisions, the claimants would at least have had a strong argument to be awarded their costs for the period the defendant was proceeding on an erroneous legal basis.

Source: Tesfay & Ors, R (on the application of) v Secretary of State for the Home Department [2016] EWCA Civ 415 (04 May 2016)

Updated costs ebook

Tesfay is an important new judgment which will affect costs decisions in a very considerable number of immigration judicial review claims. I last updated my costs ebook some time ago but have updated to a second edition to take into account the case law we have seen over the last year or so (for example Bhatt, SN, Kaienga, Soreefan, Turay, MSM, Sino, Khan and Tesfay itself. I have added sections on costs protection for legally aided clients, appeals against costs orders, immigration consequences of failure to pay costs and calculation of costs for the Government Legal Department.

You can purchase the updated ebook here or existing customers can re-download from the shop page (click the dropdown to do so).