W (A Child) v Portsmouth Hospital NHS [2006] EWCA Civ 529

[2006] EWCA Civ 529Case No B4/2005/0912
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
FAMILY DIVISION:
MR JUSTICE HEDLEY
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 03/05/2006
Before
LORD JUSTICE LAWSLORD JUSTICE WALLLORD JUSTICE LLOYD
Between
D AND D WAppellantsPORTSMOUTH HOSPITAL NHSRespondent
W (A Child)
Jeremy Hyam (instructed by Messrs Leigh Day & Co) for Appellant sDavid Lock (instructed by Messrs Mills & Reeve) for RespondentHearing Hearing dates : 11th April 2006
JudgmentLord Justice Wall :This is the judgment of the court.Preliminary issues
[1]This is a further chapter in the extensive proceedings between the Portsmouth Hospital NHS Trust (the Trust) and D and D W in relation to their daughter W, born on 21 October 2003. Mr. David Lock, on behalf of the Trust, now seeks an order for costs against Mr. and Mrs. W in relation to their application for permission to appeal against Hedley J’s refusal on 21 April 2005 to discharge declarations relating to W’s treatment which he had made on 8 October 2004. He also seeks an order for costs in relation to their appeal (for which Hedley J had given permission) against his decision that the declarations made on 21 April 2005 should be expressed to remain in force without limit of time.[2]We heard argument on the permission application and the appeal on 25 August 2005. In the course of his submissions, Mr. David Wolfe, for Mr. and Mrs. W described the permission application as raising the question of the correctness of the judge’s perception of what was in the best interests of W (“the best interests question”) and the appeal as raising “the timing question”. We adopted those designations in our subsequent judgment. The hearing lasted the whole day. At its conclusion we announced our decision, but reserved our reasons, which we handed down on 12 October 2005. In summary, we dismissed both the application for permission and the substantive appeal. However, we expedited a review of the declarations which the judge had himself anticipated, and for which he had set aside a period of 30 minutes for directions in October 2005. Our judgment, [2005] EWCA Civ 1181, is reported at [2005] 1 WLR 3995.[3]Mr. Lock made it clear at the outset of his argument in the present hearing that the Trust’s application for costs was made under section 11(1) of the Access to Justice Act 1999 (the 1999 Act). In other words, it was not designed to impose any financial liability on Mr and Mrs W personally. The need for an order for costs against Mr and Mrs W was, however, he argued, a necessary prerequisite for an application which the Trust wished, in due course, to make to a costs judge, namely that the Legal Services Commission (LSC), which is funding Mr and Mrs W in this litigation, should stand behind its clients and pay the Trust’s costs of the Ws’ unsuccessful permission application and appeal to this court against Hedley J’s order of 21 April 2005.[4]In his initial skeleton argument, and for an identical reason, Mr. Lock also sought an order that Mr and Mrs. W should pay the Trust’s costs incurred in their unsuccessful application for permission to appeal to this court against a previous and provisional order made by Hedley J on 28 January 2005. The Ws’ application for permission to appeal against that order was heard, on notice to the Trust and to W’s guardian, by this court in a constitution comprising Thorpe, Potter and Wall LJJ on 9 February 2005, and was refused. On that occasion, however, no application of any kind was made by the Trust for an order for its costs, and the court made no order for costs apart from a direction that there should be a detailed assessment of Mr. W’s costs in accordance with the Community Legal Service (Costs) Regulations 2000.[5]In these circumstances, Mr. Lock properly accepted in argument before us on 10 April 2006 that he could not reopen this court’s decision to make no order for costs on 9 February 2005. His application was, accordingly, limited to the costs incurred by the Trust in resisting the application for permission and the appeal which we heard on 25 August 2005.[6]The Trust’s application was vigorously opposed by Mr. Jeremy Hyam on behalf of Mr and Mrs W. Having heard argument on 10 April 2006, we reserved judgment.

Overview

[7]In our view, the question now before the court is very simple. The Trust’s case is that it has been obliged to expend very substantial sums on this highly unusual litigation. Its primary function is caring for its patients, not litigation. Unlike a local authority, it does not have duties imposed on it by Statute requiring it, in certain circumstances, to institute legal proceedings.[8]Mr. Lock pointed out that it was not open to the Trust to seek an order against the LSC in relation to costs incurred in the court of first instance, since pursuant to regulation 5(3)(c) of the Community Legal Service (Cost Protection) Regulations 2000, such an order could only be made if the proceedings had been instituted by Mr. and Mrs. W, and the court was satisfied that the Trust would suffer financial hardship unless the order was made. Those restrictions did not, however, apply in the Court of Appeal.[9]Mr. Lock submitted that whatever the position as to costs at first instance, where no orders against Mr. and Mrs W had been sought, the Trust was successful before this court on 25 August 2005. It could not realistically expect to recoup any of its costs against Mr. and Mrs. W, who are publicly funded and, so far as the Trust was aware, impecunious. The Trust therefore sought an order for costs against them under section 11(1) of the 1999 Act relating to the permission application and to the appeal, for the purpose identified in paragraph 3 above.[10]Mr. Lock also made the point, although we think it at the periphery of the case, that if the Trust was denied the opportunity to obtain its costs of the 25 August hearing from the LSC, it might well end up paying, not only its own costs of successfully resisting the proceedings in this court, but half of those incurred by CAFCASS Legal, acting as W’s guardian. Whilst we see this as a point going to the ultimate justice of the case, it is not a factor we weigh in the balance, since no such application was made by CAFCASS Legal at the conclusion of the hearing on 25 August 2005, and even if it were possible now for such an application to be made, it would be unlikely to be received by this court with any enthusiasm.[11]We had anticipated (since the Trust was not seeking to impose any personal liability on Mr and Mrs W) that an order for costs and a remission to the costs judge would be uncontentious. As the transcript of the discussion after we had announced our decision on 25 August 2005 makes clear, we adjourned the question of costs because of our uncertainty about the correct procedure. Laws LJ, in the course of the exchanges, enunciated the court’s preliminary view succinctly when he said:
“Subject to my Lords, I am sure we would make the usual order intending that the Trust obtained its costs from the Legal Services Commission if that is thought right by whoever ultimately decides it.”
[12]In these circumstances, we had hoped and anticipated that the point could be resolved through submissions in writing. It was with some surprise, therefore, that on 10 April 2006 we were faced with a plethora of detailed submissions from both sides, which included the citation of numerous, and as it transpired, largely irrelevant authorities. Indeed, the exchange of submissions continued even after judgment had been reserved. Opposition from Mr and Mrs W having been mounted, however, we must resolve the points raised.

The regulatory scheme

[13]Both the relevant statutory material, and guidance on the proper procedure to be followed when the court is considering making an order for costs against the LSC, are set out in detail in the decision of this court in R (on the application of Gunn) v Secretary of State for the Home Department (Gunn) [2001] EWCA Civ 891, [2001] 1 WLR 1634. Although the citation from that case which follows is a lengthy one, we feel we can do no better than to repeat the analysis provided by the Master of the Rolls, Lord Phillips of Worth Matravers, giving the judgment of this court, in a constitution of which Pill and Keene LJJ were the other members.[14]To make the citation from Gunn more readily comprehensible, we reproduce the relevant section of the governing statute is section 11 of the 1999 Act which provides by sub-section (1): - 11 Costs in funded cases (1) Except in prescribed circumstances, costs ordered against an individual in relation to any proceedings or part of proceedings funded for him shall not exceed the amount (if any) which is a reasonable one for him to pay having regard to all the circumstances including— (a) the financial resources of all the parties to the proceedings; and (b) their conduct in connection with the dispute to which the proceedings relate[15]Section 11 of the 1999 Act also contains a Regulation making power, and the references to Regulations are as follows. In paragraphs [27] to [32] of the judgment in Gunn they are to the Community Legal Service (Costs) Regulations 2000 (the Costs Regulations); in paragraph [33] of the judgment they are to the Community Legal Service (Cost Protection) Regulations 2000 (the Cost Protection Regulations).[16]The following is this court’s summary of the regulatory scheme: - see [2001] 1 WLR 1634 at 1644: - The regulatory scheme [27] The new regulations introduce a two-stage process in relation to the recovery of costs in cases to which s 11(1) of the 1999 Act applies. The procedure to be followed is primarily to be derived from the costs regulations. The scheme is as follows. Stage 1 [28] The first stage involves the court dealing with the substance of the dispute, which we shall call the trial court. The role of the trial court is as follows.(i) To decide whether to make an order for costs against a funded litigant (the client) (reg 9(1)).(ii) To decide whether it is in a position to specify the amount, if any, to be paid by the client (reg 9(2)).(iii) To make a costs order against the client which either (a) specifies the amount, if any, to be paid by the client and states the amount of the full costs, or (b) does not specify the amount to be paid by the client (reg 9(3) and (4)). The order is described in the regulations as a s 11(1) costs order and is defined in both sets of regulations as a ‘costs order against a client where cost protection applies’. ‘Cost protection’ means ‘the limit set on costs awarded against a client set out in s 11(1) of the Act’.(iv) Where the order does not specify the amount to be paid by the client, to make, if it sees fit, findings of fact, as to the parties’ conduct in the proceedings or otherwise, relevant to the determination of the amount (reg 9(6)). Stage 2 [29] Stage 2 consists of the procedure to be followed to ascertain the amount of costs to be paid by the client against whom the trial court has made an order that does not specify the amount. Stage 2 also includes the procedure for determining whether an order for costs should be made against the Commission (reg 9(5)). The regulations in relation to Stage 2 allocate certain functions to ‘the Court’. Regulation 10(10) provides that in relation to proceedings in the Court of Appeal, High Court or county court the court’s functions ‘may be exercised’ by a costs judge or a district judge. While it is arguable that the High Court and the Court of Appeal also enjoy jurisdiction to exercise these functions, we think it plain that the scheme does not envisage that they should do so. [30] Regulation 2 provides that ‘Costs Judge’ has the same meaning as in the CPR. CPR 43.2(1)(b) provides that ‘Costs Judge’ means a taxing master of the Supreme Court. [31] The procedure under Stage 2 is as follows. (i) The party in whose favour the costs order has been made (the receiving party) may, within three months of the making of the costs order, request a hearing to determine the costs payable to him (reg 10(2)). (ii) The receiving party may, at the same time, seek a costs order against the Commission. (reg 10(3)(c)). We wish to take this opportunity to emphasise a fact that we understand is not generally appreciated. The three-month time limit for seeking an order against the Commission is mandatory—there is no power to extend it. (iii) The receiving party must, when making the request, file with the court and serve on the client and the regional director of the Commission (if an order is sought against the Commission): (a) a bill of costs; (b) a statement of resources; and (c) a written notice that a costs order is sought against the Commission (reg 10(3) and (4)). (iv) The client must file a statement of resources and serve this on the receiving party and the regional director (where a claim is made on the Commission) (reg 10(6)).(v) The court sets a date for the hearing (reg 10(9)).(vi) The court conducts the hearing, assesses the costs (if any) to be paid by the client and, where appropriate, makes a costs order against the Commission. [32] The costs regulations do not, in fact, expressly provide that the costs judge shall carry out the functions set out under (vi) above, but it is plainly implicit that he should. That this is part of his role is confirmed by the explicit provisions of the cost protection regulations. [33] The cost protection regulations set out the circumstances in which the costs judge or district judge may make a costs order against the Commission. Regulation 5(3) makes it plain that it is for the costs judge or district judge to be satisfied that it is just and equitable that provision for the costs should be made out of public funds and, in respect of proceedings at first instance, that the non-funded party will suffer severe financial hardship unless the order is made. In considering these matters the costs judge or district judge is expressly required to have regard to the resources of the non-funded party and of his partner – reg 5(6). [34] We have set out the new regulatory scheme in detail because we have concluded that it is not compatible with the current practices of the trial court. The function of deciding whether or not a costs order can and should be made against the Commission is now expressly assigned to the costs judge or district judge. He cannot make such an order unless and until the prescribed formalities have been completed. It is not open to the trial court to rule that it is just and equitable to make the order or to direct that the order is to be made before the prescribed formalities have been completed. Regulation 9(6) of the costs regulations permits the trial court, when making a costs order, to make findings of fact relevant to the determination of the amount to be paid by the client. We consider that it must also be open to the trial court to make any findings in relation to the conduct of the parties or facts that have emerged in the course of the proceedings that have relevance to the task to be performed by the costs judge or district judge. Beyond this the trial court should not go. It follows that, in the cases before us, this court should not have usurped the function of the costs judge—in these cases the taxing master—in deciding that it was just and equitable to make a costs order against the Commission and to direct that such an order be made. This practice must no longer be followed, whether in the county court, the High Court or the Court of Appeal. This guidance is manifestly binding on us, and we propose to follow it. We are plainly engaged, and only engaged, in stage 1 of the regulatory scheme: - see paragraph [28] of the citation set out above.

Have the proceedings been finally decided in favour of the non-funded party?

[17]A point which initially troubled us, and on which we specifically sought assistance, was the wording of regulation 5(1)(b) of the Cost Protection Regulations, which applies the Regulations where the proceedings in question “are finally decided in favour of the non-funded party”. We raised this point because at the same time as dismissing the Ws’ appeal on the timing question on 25 August 2005, we ordered the acceleration of the review of the declarations which Hedley J had himself directed. Following that review, the judge delivered a judgment on 21 October 2005 ([2005] EWHC 2293 (Fam)), as a result of which the declarations were discharged. However, on 23 February 2006, following a deterioration in W’s condition, the judge re-instated the authority previously given to the Trust to refrain from intervention by way of intubation and ventilation in appropriate circumstances. Against this background, could it properly be said that our order on 25 August 2005 “finally decided” the proceedings in favour of the Trust?[18]In the event, the point turned out to have been considered by this court, since the implementation of the current regulatory scheme, in the judgment of Chadwick LJ in Masterman-Lister v Brutton & Co (Nos 1 and 2) [2003] EWCA Civ 70, [2003] 1 WLR 1511 at 1542. In that case, the claimant had been funded by the LSC. He appealed against the judge’s decision in personal injury litigation that he was not a “patient” and that he had been fully capable of managing and administering his affairs for many years. He lost. The respondents to the appeal wished to apply for an order that their costs be paid by the LSC. It was not in dispute that the claimant should be ordered to pay the costs of the respondent to each appeal, and that “the determination of the amount of those costs which it is reasonable for the plaintiff to pay” should be referred to a costs judge in accordance with the 1999 Act and the Regulations. The proceedings were, however, ongoing, and the question arose whether or not the costs judge would have jurisdiction in those circumstances to make an order against the LSC.[19]At para C7 of his judgment, [2003] 1 WLR 1511 at 1543, Chadwick LJ said: - “C7. For my part I am not at all attracted by the suggestion that the question what order should be made in relation to the costs of this appeal should be adjourned for what may be a lengthy and indefinite period while these proceedings work their way through to final disposal. I can see no reason why a Section 11 (1) costs order should not be made at this stage in the form of paragraph 3 of the draft order that has been put before us; that is to say, an order that the determination of the appellant's liability, if any, to pay costs and any application by the respondent for an order for payment of such costs by the Legal Services Commission be referred to a costs judge in accordance with Regulation 10 of the Community Legal Services Costs Regulations 2000. I would amend the paragraph so that it covers not only an application for an order under Section 18 of the Legal Aid Act 1988 but also an application under Regulation 5 of the Costs Protection Regulations 2000. The effect of an order in that form, as it seems to me, will be that any application for payment of Burton & Co's costs by the Legal Services Commission will have to be made within three months of the date of the order. If, on such an application, the Legal Services Commission takes the point that the application is premature the costs judge will have power to adjourn the matter until there has been a final resolution of the proceedings; or, if he thinks it necessary, to refer the point for guidance by an appellate court. C8. My present view is that further guidance is unnecessary. To my mind the point is covered by the observations of Lord Denning MR in General Accident Car and Life Assurance Corporation Ltd v Foster [1972] 3 All ER 877. At page 880B, by reference to the comparable provisions then in the Legal Aid Act 1964, he said this:
"The first point is: what are the 'proceedings'? Are they the proceedings from beginning to end - from the very first time when legal aid was granted? I think not. The only 'proceedings' with which we are concerned is the interlocutory appeal to this court, which we heard on 19 January 1971 ..... "
C9. The only proceedings in relation to which we are asked to make an order for costs are the proceedings in this court. Those proceedings have been finally determined; and I can see no difficulty in the exercise by a costs judge of the jurisdiction conferred by the statute and the regulations in relation to the costs of those proceedings.” "The first point is: what are the 'proceedings'? Are they the proceedings from beginning to end - from the very first time when legal aid was granted? I think not. The only 'proceedings' with which we are concerned is the interlocutory appeal to this court, which we heard on 19 January 1971 ..... "[20]We respectfully agree with that analysis. In our judgment, the fact that there has been further consideration of the declarations at first instance is no bar to this court making an order for costs against Mr and Mrs W for the purposes of a reference to the costs judge under section 11(1) of the 1999 Act.

The effect of potential applications for permission to appeal to the House of Lords

[21]The only point which Mr. Hyam advanced on this part of the argument was that there remained outstanding the determination of Mr and Mrs Ws’ application for permission to appeal to the House of Lords against our decision on 25 August 2005. He pointed out that under regulation 5(5) of the Cost Protection Regulations, an order under Regulation 5 against the LSC did not take effect until the time allowed for the appeal process had been exhausted (we paraphrase). The appeal proceedings would only be “finally determined”, Mr. Hyam argued, when the conditions in Regulation 5(a) and (b) were satisfied. They were not, he submitted, so satisfied in this case.[22]As Mr. Hyam recognised, regulation 5 of the Cost Protection Regulations relates to orders against the LSC – that is to say, stage 2 of the regulatory scheme. We are not being asked to make an order against the LSC. We agree with Mr. Hyam that any application of regulation 5 of the Cost Protection Regulations is a matter for the costs judge, and not for us. It does not, in our judgment, affect the order which we are invited to make.[23]As the question of an appeal to the House of Lords has been raised, however, we should point out that we had intended, as a matter of convenience, to deal with Mr and Mrs Ws’ application for permission to appeal against our order dated 25 August 2005 on the same occasion as we resolved the costs question. However, Mr. Hyam had not argued the Ws’ case either before us on 25 August or before the judge in relation to the decision under appeal. He was not, accordingly, in a position to argue a permission application on 10 April 2006, and we agreed to deal with it on paper, on the basis of written submissions already put in by Mr .David Wolfe on behalf of Mr. and Mrs. W.[24]No question of an appeal to the House of Lords can arise against our refusal to grant permission to appeal on the best interests question (see paragraph 2 of this judgment). This is because Direction 1.6 of the House of Lords Practice Directions and Standing Orders Applicable to Civil Appeals (2003) renders inadmissible a petition for leave to appeal from a refusal by this court to grant permission to appeal from a judgment of a lower court.[25]In a separate document, we have refused the Ws’ permission to appeal on the timing question. Quite apart from the substantial lapse of time, the declarations continued by the judge in April 2005 and upheld by us on 25 August 2005 have since been both discharged and re-instated. Any appeal against our decision of 25 August 2005 would, in our view, be academic. It is, of course, open to Mr and Mrs W to petition the House of Lords for permission to appeal against our order on the timing question. However, we see no reason why this possibility should prevent us from making an order for costs in the context of the question of the LSC’s liability for the Trust’s costs of the 25 August 2005 hearing being determined by a costs judge, who will in any event have a discretion to adjourn it in the event that an appeal to the House of Lords is outstanding.

The impact of CPR 44.3: does it apply?

[26]CPR 44 is headed:
“General Rules about Costs”
. CPR 44.3 is headed “Court’s discretion and circumstances to be taken into account when exercising its discretion as to costs”. It gives this court both a discretion and guidance as to how that discretion is to be exercised. It provides a “general rule” that the unsuccessful party will be ordered to pay the costs of the successful party, but also gives the court the power to make a different order. It disapplies that general rule in relation to proceedings in the Court of Appeal on an application or appeal made in connection with proceedings in the Family Division, although that disapplication does not remove the discretion to make an order for costs in an appropriate case. It requires the court, before making an order, to have regard to all the circumstances, including the conduct of all the parties, and whether a party has succeeded on part of his case, even if he has not been wholly successful. It provides examples of what conduct includes. These are widely drawn, and include conduct before, as well as during, the proceedings; whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; the manner in which a party has pursued or defended his case or a particular allegation or issue; and whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim.[27]However, CPR 44.17 states that part 44 of the CPR (together with parts 46, 47 and 48, which deal respectively with Fast Track Trial Costs; the Procedure for Detailed Assessment; and Special Cases) does not apply “to the assessment of costs in proceedings to the extent that section 11 of (the 1999 Act) and provisions made under that Act…. make different provision”. It also provides that the Costs Practice Direction sets out the procedure to be followed where a party is wholly or partially funded by the LSC. We do not think that the actual terms of the Practice Direction add anything to this court’s analysis in Gunn and do not propose to set out its terms.[28]What is the effect of CPR 44.17? Does it mean, in particular, that CPR 44.3 can be disregarded when the court is deciding whether or not to make an order for costs under regulation 9(1) of the Costs Regulations? Neither counsel submitted that it could. Both argued that CPR 44.3 applied, and Mr. Hyam relied on CPR 44.3 as establishing a general rule – effectively a presumption - which precluded this court from making an order for costs in the Trust’s favour.[29]We have come to the conclusion that CPR 44.3 does apply to our consideration under Regulation 9(1) of the Costs Regulations as to whether, but for costs protection, we would have made an order for costs against Mr and Mrs W in relation to the hearing on 25 August. We do so for the simple reason that the “assessment of costs” is about their quantification, not about whether or not an order for costs should be made in the first place. Where we part company from Mr. Hyam, however, is that we emphatically reject his submission that either CPR 44.3 or any of the authorities prevent this court making such an order on the facts of this case. We turn, therefore to the Regulation 9(1) question.

The application of the 1999 Act and Regulation 9(1) of the Costs Regulations

[30]The various documents put in by counsel ranged far and wide. We were referred to a number of authorities, several dealing with the well-established proposition that in private law proceedings between parents relating to children the court was reluctant to make orders for costs, particularly at first instance, and would usually only do so if one of the parents had conducted him or herself in a manner which could properly be designated unreasonable.[31]This line of authority, and the re-affirmation of what were described as the “well-established principles” relating to costs in private law applications relating to children were recently the subject of a decision of this court in Re T (Order for Costs) [2005] EWCA Civ 311, [2005] 2 FLR 681. It is not, however, in our judgment, relevant to the issue which we have to decide, and we did not find any of the cases of assistance. We are not dealing with private law proceedings between parents under the Children Act 1989. We are dealing with highly unusual proceedings in which a public body has invoked the inherent jurisdiction of the Family Division in relation to children and has sought a declaration that a proposed course of conduct in relation to a gravely ill child is lawful. In our judgment, quite different considerations apply in such a case, particularly in this court.[32]As we have already made clear, we are plainly at the first stage of the regulatory scheme described in Gunn. In our judgment, the most sensible course, therefore, is to follow the guidance given by that case, and go through the first stage identified by the court in paragraph [28] of its judgment.[33]The first point we must address, therefore, is the two-part question posed by regulation 9(1) of the Costs Regulations, which, for ease of reference, we will set out in full: - Where the court is considering whether to make a section 11(1) costs order, it shall consider whether, but for cost protection, it would have made a costs order against the client and, if so, whether it would, on making the costs order, have specified the amount to be paid under that order.[34]Applied to the facts of this case, and in the context of our consideration whether or not to make a section 11(1) costs order, the first limb of that question becomes: had the Ws not been publicly funded, would this court have made an order for costs against them at the conclusion of their application for permission to appeal, and of the appeal itself? We are of the clear view that the answer to that question is “yes”.[35]In our judgment, such a conclusion has nothing to do with the need for there to have been reprehensible behaviour on the Ws’ part, or any preconceived determination of the manner in which judicial discretion has to be exercised under CPR Order 44.3. It has everything to do, we think, with the proper exercise of a judicial discretion to make orders for costs following the outcome of proceedings in this court. It is also, we think, consistent with the overriding objective contained in CPR 1.1(1).[36]In our judgment, and depending always, of course, upon the facts of the individual case, there is inevitably a substantive difference between orders made at first instance and those made on appeal. Self-evidently, facts which are in dispute at first instance - and on which different professional and lay views can be expressed – are resolved by the time the matter reaches this court, and cannot usually be re-opened. A decision whether or not to appeal has to be made in the light of the facts found by the court of first instance, and that court’s application of the law to those facts.[37]The difference identified in the previous paragraph is clearly demonstrated by the facts of this case. The decision whether or not W should be ventilated in the event that she developed a potentially fatal infection was one on which her parents and the Trust could not agree. Mr and Mrs W have parental responsibility for W and the right to give or withhold consent to their daughter’s treatment by the Trust. They wanted her ventilated. The Trust had clinical responsibility for W’s treatment and welfare. The Trust’s doctors opposed ventilation. That issue was, potentially, a matter of life or death for W, and it had to be litigated. It was. The judge upheld the Trust’s standpoint. However, he was not asked to make, and did not make any order as to costs. That, in our judgment, was plainly correct, and reflected a proper recognition that a judicial resolution of the best interests issue between two parties with conflicting rights and duties was the only means of resolving it.[38]Mr. and Mrs W did not seek to appeal against the declarations when they were first granted in October 2004. It was not until April 2005 that they sought to challenge Hedley J’s subsequent refusal to discharge the declarations. The judge had manifestly taken enormous care over both decisions. Ultimately, the best interests question was a matter of the application of the law to the facts as the judge, on a careful analysis, found both to be. That he was plainly right is demonstrated by the fact that Mr and Mrs W’s attack on his judgment did not get past the permission stage. The further fact that this court examined the argument in some detail does not detract from the validity of Hedley J’s judgment: it is simply a reflection of the court’s recognition of the importance of the issue for the child.[39]Whilst there are some issues in the Family Division, as in other Divisions of the High Court, which simply cannot be resolved without a hearing at first instance, a party to proceedings does not have to appeal against an adverse outcome, or indeed necessarily take advantage of the grant of permission to appeal. As we have already pointed out, Mr. and Mrs W did not appeal against the declarations originally made by Hedley J in October 2004. They did not have to appeal against his decision not to re-visit the declarations made in April 2005. They chose, no doubt on advice, to do so. They failed. The fact that the judge gave them permission to appeal on the timing issue does not, in our judgment, protect them against the hypothetical order for costs now under consideration. The point was, as we remarked in our judgment, an interesting and finely balanced one, but as we have already stated, by the time it came to be heard, it was effectively merged into the question of the review, which the judge had already anticipated.[40]Furthermore, on the timing issue, all the parents could reasonably have expected to achieve, had their appeal been successful, was a remission to the judge to reconsider the form of the declarations. In fact what they achieved was the modest acceleration of a process which the judge himself had put in motion – namely reconsideration by way of a review.[41]There is a further point. In the instant case, the permission application on the merits issue was delayed pending the outcome of the decision of this court in R (Burke) v General Medical Council (Official Solicitor and Others Intervening) [2005] EWCA Civ 1003, [2005] 2 FLR 1223 (Burke). In that case, Munby J had embarked on a detailed analysis of the judicial and medical approach to best interests in the context of the medical treatment of both competent and incompetent patients, the latter a point at the heart of the instant case. He had accepted an approach to the best interests question advanced by Mr. Wolfe, who, in Burke, was acting for one of the intervening parties.[42]Mr. Wolfe sought to advance the same approach in the instant case. Although, in the event, this court did not think it necessary in Burke to examine Munby J’s analysis of the best interests question in relation to incompetent patients, it made clear its general disagreement with his overall approach. That, in our view, should have sent a warning signal to Mr. and Mrs. W that this court would not be receptive to an attack on Hedley J’s careful and sympathetic analysis of the best interests question, an attack which derived specifically from Munby J’s acceptance of Mr. Wolfe’s approach to the same question.[43]These are, we appreciate, matters of judgment. We raise them because we emphatically reject Mr. Hyam’s submission that “conduct” in CPR 44.3 can only be brought into account if it is either wholly unreasonable or in some way discreditable, or that an order for costs such as is sought here would only be made in “exceptional circumstances”. We also deprecate the exaggerated language in which Mr. Hyam couched his submissions. No doubt there are times in litigation when attack is the best form of defence, but in our judgment it is unhelpful for an advocate to describe the perfectly sensible orders which his opponent seeks as “contrary to the clear wording of the rules, and confounded by practice and precedent” - whatever that may mean.[44]Furthermore, at another point in his principal skeleton argument prepared for this application, Mr. Hyam argued that were this court, in the instant case, to depart from what he described as “the general rule” that there should be no order for costs in cases such as the present, then “such a decision would be likely to have a chilling, and unwarranted deterrent effect on the involvement of parents in cases which concern the medical treatment needs of their children and which (through no fault of their own) became the subject of declaratory proceedings in the Family Division.” For good measure, he added that such an approach would be contrary to the public interest.[45]We have no hesitation in rejecting this argument. In the first place, cases such as the present are, fortunately, highly unusual. W’s situation is, in this court’s experience, unique. Where a Trust is unable to reach agreement with a child’s parents over life and death decisions relating to the child’s health, it will, in the last resort, seek a declaration from the High Court that what it intends to do (or to refrain from doing) is in the best interests of the child and thus lawful. As we pointed out in our judgment on the substantive application, most cases are, in the crude phrase “one-off”. The declaration is designed to meet a particular emergency or a particular condition, and the court’s involvement ceases once the declaration is made. Nobody, least of all the courts or the LSC, could take the view that the child’s parents should not be fully involved in the court process. It would be outrageous, and a breach of ECHR, if parents who otherwise qualified for public funding were denied it in these circumstances.[46]The fact that the Ws’ involvement in the proceedings was necessary (despite legitimate criticisms of their conduct) has been marked in the instant case (as in others in our experience) by the Trust not seeking an order against them at any of the first instance hearings.[47]Whether or not the need for the current proceedings are in any way the “fault” of Mr and Mrs W is not an issue which it is necessary for us to address, and which we have no desire to address. Judges, in cases such as the present, acutely aware of the many stresses on the parents of a desperately ill child, strive to avoid the attribution of blame. There are, however, aspects of parental behaviour in the instant case - such as reporting the Trust’s medical staff to the police for alleged assaults on W and refusing to agree to her being sedated when her leg was accidentally broken – which, if investigated fully, might well warrant censure.[48]If the costs judge takes the view that the Ws’ conduct (as found by the judge) is in any way relevant to his determination of the Trust’s application for costs against the LSC he will no doubt say so. We do not wish to go down that road, nor is it necessary for us to do so. It is, in our judgment, enough for us to say that on the facts of this case, the parents’ failure on both permission to appeal and appeal would, for the reasons we have given, and had they not been publicly funded, have led to an order for costs being made against them.[49]Against this background, and on these facts, it would, in our judgment, be most unfortunate – indeed absurd - if our hypothetical discretion under regulation 9(1) of the Costs Regulations was fettered by CPR 44.3 to the extent that we could not make an order against Mr and Mrs. W for the purposes of section 11(1) of the 1999 Act.[50]We see nothing in CPR 44.3 which, on the facts of this case, prevents this court from applying regulation 9(1) of the Costs Regulations and considering whether, but for cost protection, it would have made a costs order against Mr. and Mrs W in the context of an application under section 11 of the 1999 Act. We reject Mr Hyam’s submission that we could only properly make an order against Mr and Mrs. W (were they not publicly funded) because they had in some way behaved reprehensibly. That submission elevates the concept of conduct to a pre-eminence which CPR 44.3 does not give it.[51]In our judgment, it is of crucial importance to remember throughout that we are not being asked to make an order for costs against the LSC, nor are we deciding the extent to which, if at all, the LSC should underwrite the Trust’s costs. Those are matters for the costs judge at stage two of the regulatory procedure. It is for the costs judge to decide whether or not it is just and equitable to make an order against the LSC. What Parliament has done is to set a hypothetical threshold criterion without which the costs judge cannot entertain an application against the LSC. In our judgment, this case easily crosses that threshold.[52]The only authority which we think in point in this context (albeit only peripherally) is the decision of this court in Re O (A Minor) (Legal Aid Costs) [1997] 1 FCR 159, even though it was decided under the Legal Aid Act 1988 and the now revoked Legal Aid Regulations. Grandparents should have conceded at an early stage in the Court of Appeal that an order made by the judge in proceedings relating to their grandchild had been made without jurisdiction. Stage 1 of the then regulatory process (an order against the grandparents, equivalent to an order under Regulation 9(1) of the Costs Regulations) had already been made. Thus the case’s relevance to what we have to decide is marginal. It is largely directed to the exercise of the costs judge’s power to make an order against the Commission, not to this court’s decision to consider whether or not we would have made an order for costs against Mr and Mrs W had they not been publicly funded. That decision, in Re O, had already been taken.

Should we specify the amount to be paid by Mr. and Mrs W?

[53]As the first test set out in regulation 9(1) of the Costs Regulations is satisfied, we then move to the second part of regulation 9(1), which for ease of reference we will repeat: - Where the court is considering whether to make a section 11(1) costs order, it shall consider whether, but for cost protection, it would have made a costs order against the client and, if so, whether it would, on making the costs order, have specified the amount to be paid under that order.[54]Although we have the guidance in Gunn, it is, we think, nonetheless helpful to set out the remaining parts of Regulation 9, since it identifies the court’s options when exercising its powers under the first stage of the regulatory scheme. The relevant parts of Regulation 9 thus read: - (2) If the court considers that it would have made a costs order against the client, but that it would not have specified the amount to be paid under it, the court shall, when making the section 11(1) costs[55]Regulations 10 and 10A deal with the consequences of an order made under Regulation 9, and we do not think it necessary to set them out. The guidance given by Gunn identifies our task under Regulation 9(2) as being “to decide whether it (the court) is in a position to specify the amount, if any, to be paid by the client”. Whilst the construction of the second limb of Regulation 9(1) is not altogether easy, it seems to us that when read in the context of regulations 9(2) and (3) the capacity to “specify the amount to be paid under the order” depends essentially upon whether this court is being, or would have been asked to assess the costs summarily, or to direct a detailed assessment. If the latter, regulation 9(2) applies: if the former, regulation 9(3) is apt.[56]In the instant case, there was no request for summary assessment. We would not, accordingly, have been in a position to “specify the amount to be paid under the order” under regulation 9(1).[57]This, however, is not the end of the matter, because under regulation 9(2) the court moves from hypothesis into actuality. We would have made an order but for costs protection: we would not, however, have been able to specify the amount under that hypothetical order which we would have directed the Ws to pay. But under the section 11(1) costs order, which we are now making, we can, pursuant to regulation 9(2)(a), specify the amount the Ws should pay under it “if, but only if” the provisions of that sub-regulation are satisfied.[58]In our judgment, it is in these circumstances open to us to say that we do have sufficient information to decide what amount the Ws should pay. Section 11(1) of the 1999 Act requires that the amount “shall not exceed the amount (if any) which is a reasonable one for (them) to pay”. The Trust’s case is that it is not seeking to make the Ws personally liable. They are publicly funded and we are entitled to accept the Trust’s assertion that they are impecunious. This court is not aware of anything inconsistent with that assertion, and it seems all too likely. A combination of these two factors, in our judgment, satisfies regulation 9(2)(a)(i), and it is self-evident that if we were to determine the full costs here and now, they would be more than nothing. In these circumstances, it is, in our judgment, open to us to specify that the amount the Ws should pay under the costs order is nothing. That, accordingly, will be our order.[59]This solution has an additional advantage which is both practical and psychological. If we did not specify the amount payable by the Ws under the section 11(1) order, the costs judge, exercising his jurisdiction under part 2 of the regulatory scheme, would have to determine how much the Ws should pay. That, as we understand the Cost Protection Regulations, would require the Trust’s application against the LSC to be served on the Ws, who would have to file a statement of resources.[60]We are very conscious of the fact that W continues to be treated by the Trust. It would, in our view, be an aggravating factor in the relationship between Mr and Mrs W and the Trust were they to be engaged in ongoing litigation over costs, particularly if the result of service on them of the Trust’s subsequent application and the need to file a statement of resources had the consequence that the amount they were to contribute to the 1999 Act section 11(1) order was determined to be nil. Thus although, on one reading, it might seem as if we were trespassing on the jurisdiction of the costs judge in relation to part 2 of the regulatory scheme, we are not, in our judgment, on the unusual facts of this case, doing so.[61]As we are specifying the amount which the Ws have to pay – nothing - Regulation 9(6) does not apply. Subject to any suggestions from counsel, therefore (whom we invite to draft the order) our order will be to the following effect: -(1) there will be a costs order against Mr and Mrs W under section 11(1) of the Access to Justice Act 1999 in relation to their unsuccessful application for permission to appeal the best interests question, and their unsuccessful appeal against the timing question arising out of the judgment of Hedley J given on 21 April 2005;(2) Pursuant to regulation 9(2) of the Community Legal Service (Costs) Regulations 2000, the amount which Mr and Mrs W are to pay under the AJA section 11(1) costs order is nothing;(3) subject to the Trust making a request within three months of the date of this order for a hearing to determine the amount of the costs payable to it by the Legal Services Commission in relation to the costs incurred by the Trust in resisting the permission application and the appeal identified in paragraph (1), the assessment of that amount shall be made by a costs judge pursuant to Regulation 10 of the Community Legal Services Commission (Costs) Regulations 2000.

Footnote

[62]We cannot forbear making the comment that the whole exercise set out in this judgment could have been avoided if the parties had taken proper note of Laws LJ’s observations set out in paragraph 11 above. The point should not have been contentious. Whether or not the Trust succeeds against the Legal Services Commission is not a matter for this court, nor is it of any personal financial interest to Mr. and Mrs. W. Instead of a sensible recognition that, in a case of this nature, the Trust was entitled to ask that the LSC reimburse it a relatively small proportion of the costs it has expended on this case overall, we have had a plethora of skeleton arguments and a full hearing. Whilst we are not, we think, in wasted costs territory, the extensive exercise which we have been obliged to conduct was unnecessary. The point is a simple one, and the answer to it, on proper analysis, straightforward.

order

(a) specify the amount (if any) that the client is to pay under that order if, but only if: (i) it considers that it has sufficient information before it to decide what amount is, in that case, a reasonable amount for the client to pay, in accordance with section 11(1) of the Act; and (ii) it is satisfied that, if it were to determine the full costs at that time, they would exceed the amount referred to in sub-paragraph (i);(b) otherwise, it shall not specify the amount the client is to pay under the . . . costs order. (3) If the court considers that it would have made a costs order against the client, and that it would have specified the amount to be paid under it, the court shall, when making the section 11(1) costs order: (a) specify the amount (if any) that the client is to pay under that order if, but only if, it considers that it has sufficient information before it to decide what amount is, in that case, a reasonable amount for the client to pay, in accordance with section 11(1) of the Act; (b) otherwise, it shall not specify the amount the client is to pay under the . . . costs order. (4) Any order made under paragraph (3) shall state the amount of the full costs. (5) The amount (if any) to be paid by the client under an order made under paragraph (2)(b) or paragraph (3)(b), and any application for a costs order against the Commission, shall be determined in accordance with regulation 10, and at any such determination following an order made under paragraph (2)(b), the amount of the full costs shall also be assessed. (6) Where the court makes a section 11(1) costs order that does not specify the amount which the client is to pay under it, it may also make findings of fact, as to the parties’ conduct in the proceedings or otherwise, relevant to the determination of that amount, and those findings shall be taken into consideration in that determination.

Cited in 1 later judgment