Yenula Properties Ltd. v Naidu [2003] EWHC 9009 (Costs)

Case No 02/700[2003] EWHC 9009 (Costs)IN THE HIGH COURT OF JUSTICESUPREME COURTS COST OFFICESupreme Courts Cost OfficeClifford InnVenue Fetter LaneLondonEC4A 1DQDate 20 June 2003
Before
MASTER CAMPBELL, COSTS JUDGE
Between
YENULA PROPERTIES LTDClaimantVENKAT MUN SWAMI NAIDUDefendant
Mr Gimlette instructed by the Legal Services CommissionMiss Windsor (instructed by S J Berwin) for ClaimantHearing Hearing date : 17 March 2003
JudgmentMaster Campbell:
[1]On 17 March 2003 I heard submissions by Counsel concerning the following preliminary issue which I had identified for determination in this case:
"Whether it is open to the Claimant to pursue the application dated 13 September 2002 for payment of costs by the Legal Services Commission to the Claimant pursuant to Regulation 5 Community Legal Service (Costs) Regulations 2000."
[2]At the conclusion of the hearing I reserved my judgment and informed the parties that this would be handed down in writing. BACKGROUND[3]The background to the application concerns litigation between the parties involving a property at Flat 4, Bryanston Street, London, W1. The Claimant ("Yenula"), a subsidiary of British Land, owns the freehold and on 4 August 1995 let flat 4 to the Defendant ("Mr Naidu"). On 9 March 2000 Yenula issued proceedings for a declaration that the tenancy was an assured shorthold tenancy within the meaning of the Housing Act 1998. On 30 March 2000 Mr Naidu signed an application for legal aid. On 17 April 2000 this was granted. On 30 October 2000 His Honour Judge Bradley gave judgment in favour of Mr Naidu. On 18 July 2001 Lloyd J allowed Yenula’s appeal. On 23 May 2002 the Court of Appeal dismissed Mr Naidu’s appeal from the judgment of Lloyd J and refused permission to appeal. On 9 December 2002 the House of Lords dismissed Mr Naidu’s petition for leave to appeal against the judgment of the Court of Appeal. At first instance, before Lloyd J and in the Court of Appeal Mr Naidu had the benefit of public funding under certificate number TJBMENEICC 55/A/E/1.[4]Paragraph (2) of the Court of Appeal’s order dated 23 May 2002 provides:
"The Claimant’s costs of this appeal shall be paid by the Defendant (in addition to the costs of the appeal before Mr Justice Lloyd and the trial at first instance) subject to the costs protection provided by Section 11(1) of the Access to Justice Act 1999 and Regulations 9 and 10 of the Community Legal Service (Costs) Regulations 2000. The full costs of the Claimant shall be determined by a Costs Judge and there shall be a detailed assessment of those costs of the Claimant which are payable out of the Community Legal Services Fund."
[5]On 13 September 2002 Yenula issued an application in Form N244 returnable before me on a date to be fixed for an order in the following terms:
"That the Defendant’s liability to pay costs be determined in accordance with the costs protection provided by Section 11(1) of the Access to Justice Act 1999 and Regulations 9 and 10 of the Community Legal Services (Costs) Regulations 2000 and any shortfall be paid by the Legal Services Commission because it is just and equitable that the costs are paid by the Defendant and/or the Legal Services Commission."
[6]On 25 September 2002 I gave directions of the court’s own initiative.[7]On 23 January 2003 the application was listed before me when I directed that the preliminary issue identified in paragraph 1 of this judgment should be determined by the court and I gave further directions for the lodging of skeleton arguments.[8]The preliminary issue was listed for hearing on 17 March 2003 when the Legal Services Commission ("LSC") was represented by Mr Gimlette and Yenula by Miss Windsor of Counsel. Before the Court was a bundle containing the skeleton arguments of both sides, the relevant orders in the case, a witness statement by Yenula’s solicitor, Charlotte Emma Biljani dated 13 February 2003, copies of relevant correspondence between the parties, transcripts of selected parts of the judgments of Judge Bradbury and Lloyd J and the various authorities relied on by both sides. LAW[9]Before the implementation of the Access to Justice Act 1999 ("the Act") on 1 April 2000, jurisdiction to make an order for the payment of costs by the LSC (formerly the Legal Aid Board) was conferred by Section 18(1) to (4) Legal Aid Act 1988 ("the Statute"). Section 11 of the Act replaced Section 18 which was repealed (Section 106 and Part 1 of Schedule 15 of the Act). From that date the LSC took over the function of the Board and following the implementation of Section 11(4)(d), Regulations, rather than the Statute have governed the power to require the LSC to meet an unassisted party’s costs.[10]The following parts of S.11 are relevant to the issue I have to decide:
"(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; and for this purpose proceedings, or a part of proceedings, are funded for an individual if services relating to the proceedings or part are funded for him by the Commission as part of the Community Legal Service … (3) Subject to subsections (1) and (2) regulations [my emphasis] may make provision about costs in relation to proceedings in which services are funded by the Commission for any of the parties as part of the Community Legal Service. (4) The regulations may, in particular, make provision – (a) specifying the principles to be allowed in determining the amount of any costs which may be awarded against a party for whom services are funded by the Commission as part of the Community Legal Service, (b) limiting the circumstances in which or extent to which, an order for costs may be enforced against such a party, (c) as to the cases in which, and extent to which, such a party may be required to give security for costs and the manner in which it is to be given, (d) requiring the payment by the Commission of the whole or part of any costs incurred by a party for whom services are not funded by the Commission as part of the Community Legal Service, (e) specifying the principles to be applied in determining the amount of any costs which may be awarded to a party for whom services are so funded …"
[11]The regulations referred to in S.11(1)(3) are:• The Community Legal Services (Costs) Regulations 2000 ("the CLS Costs Regulations")• The Community Legal Service (Cost) Protection Regulations 2000 ("the Cost Protection Regulations") (SI 2000/824) as amended by• the Community Legal Service (Cost Protection) (Amendment No.2) Regulations 2001 ("The Amendment No.2 Regulations")[12]Section 11 itself came into force by virtue of Article 2(a)(i) and (ii) of the Access to Justice Act 1999 (Commencement No.3 Transitional Provisions and Savings) Order 2000 ("The Transitional Regulations").[13]Article 5 of the Transitional Regulations provide as follows: "(1) Subject to paragraphs (2) and (3) and Article 7, 8 and 11 nothing in the provisions commenced by this Order or the transitional provisions of this Order shall take effect in relation to any of the following … (c) representation under Part IV of the 1988 Act [Civil Legal Aid]; (i) where the application is signed before 1 April 2000 and received by the Legal Aid Board before 2 May 2000 …" [Paragraphs (2) and (3) of Article 5 and Articles 7 and 11 are not relevant to the issue I have to decide and in this context it is common ground that "the application" means the application for representation under the Legal Aid Act 1988 (see skeletons of arguments Yenula and LSC at respectively paragraphs 8 and 12).].[14]Article 8 provides as follows:
"(2) Paragraph (3) applies where services mentioned in Article 5(1) and (c) have been provided in proceedings and the amount of the assisted person’s liability for costs falls to be determined under Regulation 124 of the Legal Aid General Regulations. [Civil Legal Aid (General) Regulations 1989] (3) With effect from 5 June 2000, subject to paragraph (4) Regulations 127 to 130 and 134 to 147 of the Legal Aid General Regulations shall not apply and the amount of the assisted person’s liability and any application for an order under Section 18 of the 1988 Act shall be determined in accordance with Regulations 2 and 9 to 13 of the CLS Costs Regulations. (4) References in the CLS Costs Regulations to "client", "
Section 11(1)" and "a costs order against the Commission" shall be construed, respectively, as references to "assisted person", "Section 17(1) of the 1988 Act" and "an order under Section 18 of the 1988 Act"."[15]In the Statute, S17(1) dealt with the liability of a legally assisted party under an order for costs made against him with respect to any proceedings and provided that such liability:
"Shall not exceed the amount (if any) which is a reasonable one for him to pay …"
[16]S.18 dealt with the costs of successful unassisted parties and at S.18(2) permitted the court to:
"… make an order for the payment by the Board to the unassisted party of the whole or any part of the costs incurred by him in the proceedings …"
[17]The relevant parts of Regulations 2 and 9 to 13 of the CLS Costs Regulations which govern the procedure for ordering costs against the LSC are in these terms:
"Interpretation 2 - In these Regulations; "
Cost protection" means the limit on costs awarded against a client set out in Section 11(1) of the Act … "funded services" means services which are provided directly for a client and funded for that client by the Commission as part of the Community Legal Service under Sections 4-11 of the Act." … "Section 11(1) costs order" means a costs order against a client where costs protection applies. 9– Procedures for ordering costs against client and Commission 9-(1) Where the court is considering whether to make a Section 11(1) costs order, it shall consider whether, but for costs 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. (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 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. (5) The amount (if any) to be paid by the client under an order made under paragraph (2)(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 … 10– (1) The following paragraphs of this Regulation apply where the amount to be paid under a Section 11(1) costs order, or an application for a costs order against the Commission, is to be determined under this Regulation by virtue of Regulation 9(5). (2) The receiving party may, within 3 months after a Section 11(1) costs order is made, request a hearing to determine the costs payable to him … (3) A request under paragraph (2) shall be accompanied by; (a) if the Section 11(1) costs order does not state the full costs, the receiving party’s bill of costs … (b) a statement of resources; and (c) if the receiving party is seeking or, subject to the determination of the amount to be paid under the Section 11(1) costs order, may seek, a costs order against the Commission, written notice to that effect. (4) The receiving party shall file the documents referred to in paragraph (3) with the court and at the same time serve copies of them: (a) on the client, if a determination of costs payable under S.11(1) of the Act is sought; and (b) on the Regional Director, if notice has been given under paragraph (3)(c)." 12- Variation and late determination of amount of costs: (3) Where the court has not specified the amount to be paid under the section 11(1) costs order, and the receiving party has not, within the time limit in regulation 10(2) applied to have that amount determined in accordance with regulation 10, the receiving party may, on any of the grounds set out in paragraph (4), apply for a determination of the amount that the client [my emphasis] is required to pay. (4) The grounds referred to in paragraphs (2) and (3) are the grounds that: (a) there has been a significant change in the client’s circumstances since the date of the order; (b) material information as to the client’s financial resource is available and that information could not with reasonable diligence have been obtained by the receiving party in time to make an application in accordance with Regulation 10; or (c) there were other good reasons justifying the receiving party’s failure to make an application within the time limit in Regulation 10(2)"[18]The circumstances in which costs orders against the LSC may be made are set out in the Cost Protection Regulations. Regulation 5 provides:
"(1) The following paragraphs of this Regulation apply where; (a) funded services are provided to a client in relation to proceedings; (b) those costs are finally decided in favour of a non funded party; and (c) cost protection applies. (2) The court may, subject to the following paragraphs of this regulation, make an order for the payment by the Commission to the non-funded party of the whole or any part of the costs incurred by him in the proceedings (other than any costs that the client is required to pay under a section 11(1) costs order). (3) An order under paragraph (2) may only be made if all the conditions set out in sub-paragraphs (a), (b), (c) and (d) are satisfied: (a) a section 11(1) costs order is made against the client in the proceedings, and the amount (if any) which the client is required to pay under that costs order is less than the amount of the full costs; (b) unless there is a good reason for the delay the non-funded party makes a request under regulation 10(2) of the Community Legal Service (Costs) Regulations 2000 within three months of the making of the section 11(1) costs order; (c) as regards costs incurred in a court of first instance, the proceedings were instituted by the client, the non-funded party is an individual, and the court is satisfied that the non-funded party will suffer severe financial hardship unless the order is made; and (d) in any case, the court is satisfied that it is just and equitable in the circumstances that provision for the costs should be made out of public funds."
The amendments effected by Regulations 4(1) and (2) of the Community Legal Service (Cost Protection) (Amendment No.2) Regulations 2001 (SI 3812) are shown in italics and by paragraph 3 apply to "applications for funded services made on or after 3 December 2001". THE PARTIES’ SUBMISSIONS[19]It is convenient to set out the common ground. References to "paragraph" are to paragraph numbers in Yenula’s and the LSC’s skeleton arguments respectively.a. Mr Naidu signed the application for funding before 1st April 2000 (para 5 and para 14(a)).b. From 17 April 2000 Mr Naidu was publicly funded (para 5 and para 14(b)).c. The funding limits were subsequently amended or extended (para 5 and para 14(c)).d. The substantive law applicable to the application for legal aid continued to be Sections 17 and 18 of the Statute, this being the combined effect of Article 5(1)(c) and Article 8 of the Transitional Regulations (para 8 and para 15).e. The procedure for ordering costs against the LSC is in accordance with Regulations 2 and 9 to 13 of the CLS Costs Regulations (para 8 and para 16).f. The time limit of 3 months for requesting a determination of any costs payable by the LSC under CLS Cost Regulation 10(2) is mandatory (see judgment of Phillips MR in R v Secretary of State for the Home Office ex parte Gunn [2001] EWCA 891) (para 11 and para 31).g. Yenula’s application for the determination of Mr Naidu’s personal liability to pay the costs awarded against him and for an order that the LSC should pay the shortfall, was made outside the three month time limit (para 6 and paras 9/26).h. Since Gunn was decided, the amendment to Regulation 5(3) effected by the Amendment No.2 Regulations permits the court to make an order against the LSC after the expiry of the three month time limit in certain circumstances, eg, good reason for delay (para 13 and para 28). YENULA’S SUBMISSIONS[20]Miss Windsor accepted that if the preliminary issue was to be answered in the affirmative, as she contended it should be, she would need to establish, first, that Regulation 5(3) of the Cost Protection Regulations applied and second, that Yenula could show a good reason for the delay within Regulation 4(1) of the Amendment No.2 Regulations. It is convenient to deal with each limb of Regulation 5(3) in turn. 5(3)(a) – S.11(1) COSTS ORDER MADE AGAINST THE CLIENT[21]In Miss Windsor’s submission, this part of the Regulation was satisfied because the order of the Court of Appeal dated 23 May 2002 was a S.11(1) order made against the client. It was not open to the LSC now to argue that it was not such an order, as the Commission had done in the correspondence put before the court. In the Court of Appeal, Mr Naidu had been an assisted party represented by Leading and Junior Counsel. A draft of the order had been agreed between the parties on 22 May 2002 and approved by the Court of Appeal the following day. In these circumstances, it was too late for the LSC to challenge its validity and accordingly paragraph 3(a) of Regulation 5 was satisfied.

(b) - GOOD REASON FOR THE DELAY

[22]Miss Windsor relied on the amendment which came into force on 3 December 2001 (adding the words "unless there is good reason for the delay") to overcome the fact that her client had missed the three month deadline. This expired on 23 August 2002, whereas the application for determination of the costs payable by the LSC to Yenula was made on 13 September 2002, 21 days late. In Miss Windsor’s submission, whether those words applied to the application in turn depended upon the true meaning of the amended Regulations. Paragraph 3 of the No.2 Amendment Regulations provides as follows:
"Transitional Provisions These Regulations shall apply to applications for funded services (my emphasis) made on or after 3 December 2001 and applications before that date be treated as if the Regulations had not been made."
[23]What needed to be resolved was whether the application fell within the transitional provisions. Regulation 2(1) of the Cost Protection Regulations define "funded services" as: "services which are provided directly for a client and funded for that client by the Commission as part of the Community Legal Service under Sections 4 to 11 of the Act (being the 1999 Act)".[24]Paragraph 2 of the No.2 Amendment deals with "interpretation" and provides at (2):
"Words and expressions defined in the Regulations [the Cost Protection Regulations] shall, unless the context requires otherwise, have the same meaning in these Regulations as they do in the Regulations."
[25]The words "applications for funded services" are not defined. Regulation 5 itself does not deal with applications for funded services by the legally aided party at all but with costs orders against the Commission. To that extent, in Miss Windsor’s submission, the expression "application for funded services" in the statutory instrument must be construed as "application for funds", viz funds payable out of the LSC’s funds. In other words, the reference to "applications" in paragraph 3 of the Amendment No.2 Regulations is to applications made by receiving parties for payment of their costs by the LSC on or after 3 December 2001 and not to applications by a client for funded services. This was the only way to make any sense of the transitional provisions, whilst preventing the amendments having retrospective effect. To construe "applications for funded services" narrowly, would result in a construction which made no sense because Regulation 5 is not dealing with applications by the funded party. Since Yenula had made an application for funds payable out of LSC funds after 3 December 2001, it had satisfied Regulation 5(3)(b) as amended.[26]As to the meaning of "good reason" Miss Windsor referred me to paragraph 19 of the LSC Manual. She drew attention to the fact that the LSC in certain circumstances allows solicitors acting for a funded party to make applications out of time. Where bills are submitted late for the assessment of an assisted party’s costs in favour of his own solicitors, the Regional Director of the LSC may extend the time beyond that provided for under the Civil Procedure Rules (see Manual Sections ID-031.56 to ID-03.62). In Miss Windsor’s submission, Regulation 5 is intended to mirror that regime. As a matter of policy it was difficult to see why solicitors acting for a successful non funded party should be in a different position to solicitors acting for an unsuccessful funded party.[27]Miss Windsor also referred me to Hansard and to the Parliamentary debates in both Houses prior to the coming into force of the Regulations. In her submission those debates took place on the premise that the amendments were instant and there was no suggestion of any delayed implementation. On the contrary, Baroness Scotland, the Minister for the Lord Chancellor’s Department, stated that changes were part of a large package of reforms of financial conditions for funding which were to come into effect in December 2001.[28]As to the actual reasons for the delay in making the application, Miss Windsor relied on Charlotte Bijlani’s witness statement. Three explanations were provided: first Miss Bijlani was fully occupied in dealing with three sets of proceedings involving Mr Naidu during the summer of 2002. These were very time consuming and as Miss Biljani put it "there was limited time to consider and prepare this application for costs by the claimant". Second, Yenula was contemplating a compensation claim against the LSC; it felt aggrieved that in other proceedings concerning a rent and service charge dispute, the LSC withdrew public funding only after the proceedings had run their course. Many hours had been spent by Miss Biljani, her supervising partner and her firms in-house costs draftsman preparing bills in support of the compensation claim, which prevented them working on the costs application. Third, S J Berwin lacked familiarity with the relevant area of law given that the firm acts predominantly for commercial clients, does not handle legal aid work, and their in-house costs draftsman and was unfamiliar with the Regulations. In any event the delay was short, only three weeks and a full apology had been made to the court.[29]Miss Windsor advanced an alternative case in the event that I decided against her on the issue of whether or not "applications for funded services" meant "applications for funds". The argument was this - any application for funded services should be construed as meaning all applications including those for an extension (eg. an authority to instruct a particular expert) and not just the initial application to the LSC for funding. Mr Naidu had had a number of extensions, the last of which was granted on 12 April 2002. It followed that an application for further funding must have been made in the weeks preceding that date. At the very least her clients should have their costs paid by the LSC from the date the last application for an extension was made.

(c) – FIRST INSTANCE COSTS

[30]Not relevant. The only costs pursued by Yenula were those incurred on appeal before Lloyd J and in the Court of Appeal.

(d) – JUST AND EQUITABLE

[31]Miss Windsor relied on Gunn on page 1649 at H that: "Costs Judges should proceed on the basis that it is just and equitable that the Commission should stand behind their "client", by definition under the Regulations the individual who receives funded services, unless they are aware of facts which render that result unjust or inequitable". (per Phillips MR) THE LSC’S SUBMISSIONS[32]Mr Gimlette submitted that at the heart of the Defendant’s case was a failure to understand the Regulations and a continuing misconception about what came into effect and when. The crucial dates were the dates when the application for legal aid was signed by Mr Naidu and/or received by the LSC. In the present case:a. the application was signed before 1 April 2000;b. it was clearly received before 2 May 2000 because the certificate was granted on 17 April 2000;c. the fact that the certificate was subsequently amended or extended (to cover the appeal to the Court of Appeal) did not alter the date of Mr Naidu’s application.[33]It followed that as the application for legal aid was signed before 1 April 2000 and received before the May 2000 deadline, it was an "old" certificate and therefore an "old" case. Due to the operation of Article 5(1)(c)(i) of the Transitional Regulations, the substantive law applicable to the application was the old rules, viz Section 18 of the Statute. Accordingly, contrary to Miss Windsor’s argument, S11 of the Act did not apply. Neither did the Cost Protection Regulations.[34]Mr Gimlette did agree that the CLS Costs Regulations of the new regime were applicable to the procedures to be adopted. This was on account of Article 8(3) of the Transitional Regulations set out again here for convenience:
"With effect from 5 June 2000 the amount of the assisted person’s liability and any application for an order under Section 18 of the 1988 Act shall be determined in accordance with Regulations 2 and 9 to 13 of the CLS (Costs) Regulations 2000."
[35]Notwithstanding that this was an "old" case, the procedure for ordering costs against the LSC would accordingly be determined by Regulations 2 and 9 to 13 of the CLS Costs Regulations. (Mr Gimlette and Miss Windsor were agreed on this point (see para 19(iv)and (v) above)). However, Mr Gimlette contended that as this was a Section 18 case Regulation 5 of the Cost Protection Regulations did not apply. Only Regulation 10 of the CLS Costs Regulations did via the operation of Article 8(3) of the Transitional Regulations. Sub-section (2) of Regulation 10 required Yenula to request a hearing date to determine the costs payable by the LSC within three months of the order made on 23 May 2002, that is to say by 23 August 2002. The existing application made on 13 September 2002 was out of time and, as the Master of the Rolls made clear in Gunn on page 1645 at G:
"The three month time limit for seeking an order against the Commission is mandatory – there is no power to extend it."
[36]The only circumstances in respect of which there was some leeway for "old" cases was if the application for costs was being made against the client rather than the LSC. Regulation 12(3) permitted the court to extend time but even then a good reason to comply with Regulation 12(4) was needed, eg a change in the client’s circumstances through a legacy or windfall. This was not the situation here.[37]None of the documents required by Regulation 10(3)(a) to (c) of the CLS Costs Regulations had been served in time either. In short, the application was three weeks late and that was fatal.[38]Mr Gimlette next addressed the position had this been a "new" case, viz if Mr Naidu had signed his application for funded services after 1 April 2000 and the LSC had received it after 2 May 2000. In such a case Section 11 of the Act not S.18 of the Statute would have applied and the application would have been determined in accordance with the Cost Protection Regulations. Even then, Regulation 5(3)(b) (as amended) would not have availed Yenula. Mr Gimlette understood Miss Windsor to be arguing that in paragraph 3 of the (No.2) Amendment Regulations, "applications for funded services" meant applications by the successful unassisted party for costs against the LSC. The Amendment No.2 Regulations simply did not say that. In the definition of "funded services" it was the relationship between the client and the LSC which was pivotal and not the relationship between the receiving party and the LSC.[39]As to the alternative argument that an "application" included an application for an extension to the certificate, this too was misconceived. In Mr Gimlette’s submission, the rules which were to apply derived from the date of the certificate. An application for an extension merely meant that the solicitors for the assisted party were seeking authority to spend more LSC money. If the extension was refused, the client was still legally aided. In Mr Gimlette’s view, it was the application for the original certificate that defined the relationship at the start for all the parties.[40]As to "good reason", being busy and misunderstanding the law were simply not good reasons. Yenula was a substantial entity (according to its accounts) with retained profits of £95 million for 2002 and fixed assets exceeding £400 million. It had instructed a large firm of City solicitors which ought to have been capable of getting the application right.[41]As to Hansard, Mr Gimlette observed that all that was being debated was a general principle and start dates were not even discussed during the course of argument. He did not see what comfort Miss Windsor could draw from the Parliamentary debates. DECISION[42]Despite the tortuous trail which it has been necessary to follow through the Statute, the Act, the CLS Costs Regulations the Cost Protection Regulations, the Transitional Regulations and the Amendment No.2 Regulations, the answer to the preliminary issue can be stated quite shortly. Both sides agree, correctly in my view, that this is an "old" case, that is to say one to which the applicable law is Section 18 because Mr Naidu’s legal aid certificate was granted under Part IV of the Statute. They further agree that the procedures applicable to such a case are the "new" procedures to be found in Regulation 2 and 9 to 13 of the CLS Costs Regulations. They disagree, however, about whether the Cost Protection Regulations apply, in particular Regulation 5 which at paragraph 3(a) requires a Section 11(1) costs order to be made, before the LSC can be ordered to pay a non funded party’s costs.[43]For Yenula to succeed, I agree with Miss Windsor that she must establish that the order of 23 May 2002 was a Section 11(1) costs order and that the Cost Protection Regulations apply, including Regulation 5(3) as amended.[44]Miss Windsor’s case on Section 11 was that the order of 23 May 2002 stated, in terms, that it was a Section 11(1) costs order. Absent any application by the LSC to the Court of Appeal to have the order amended to include a reference to Section 18 of the Statute, that in itself was sufficient to bring Yenula within Regulation 5(3)(a).[45]I do not share that view. Whilst I accept that the order includes the words "the costs protection provided by Section 11(1) Access to Justice Act 1999", regard must also be had to Article 8 of the Transitional Regulations. As paragraph (4) of that Article makes clear, references in the CLS Costs Regulations to a Section 11(1) costs order and a costs order against the LSC are to be construed respectively as references to "Section 17(1) of the 1988 Act" and "an order under Section 18 of the 1988 Act". In other words, the new terminology in the Regulations must be construed by reference to the language in the Statute. The order of 23 May 2002 does indeed refer to Section 11 but I agree with Mr Gimlette that the effect of Article 8 is that Section 11 is used interchangeably with Section 17/18, where, as here, an "old" case is involved.[46]It follows, that in my judgment, Section 11 of the Act does not apply and of the new regime implemented in April 2000, only Regulations 2, 4 and 9 to 13 CLS Costs Regulations apply. Since it is common ground that Yenula did not comply with the three month time limit, if, as I find, Regulation 5 of the Cost Protection Regulations does not apply, then Yenula’s breach of the Regulation 10(2) deadline is incapable of remedy. Accordingly, the application to this court is fatally flawed and it is no longer open to Yenula to pursue its claim for costs against the LSC. That is sufficient to decide the preliminary issue against Yenula.[47]In case I am wrong, I propose to consider whether it would make any difference if, as Miss Windsor contends, Regulation 5 did apply.[48]It is clear that the unamended Regulation 5 is of no assistance because even if it did apply, Yenula would still have failed the three month test. It is only if Yenula can bring itself within the amendment introduced by the No 2 Amendment which added the words "without good reason for the delay" to Regulation 5(3)(b) that its application can be saved from certain failure.[49]As I have said in paragraph 18, the Amendment No.2 Regulations apply to "applications for funded services" made on or after 3 December 2001. If that means an application by the client for legal aid, the amendment would not assist Yenula because it is common ground that Mr Naidu made his application before 1st April 2000. In my judgment, to avail herself of the amendment, Miss Windsor must demonstrate that these words refer to the timing of the successful unassisted party’s application for determination of its costs payable by the LSC and not to the assisted person’s application for legal aid.[50]I am not persuaded that Miss Windsor’s interpretation of the Amended Regulations is correct. I agree with Mr Gimlette that if it was intended that that should be the meaning, the Amended Regulations would have said so. Regulation 2 of the CLS Costs Regulations defines "funded services" as services provided directly for a client and funded by the LSC. If "funded services" was to mean something different in the Amended Cost Protection Regulations than in the CLS Costs Regulations, in my opinion the draftsman of the Amended Regulations would have made that clear in terms. In my judgment, "applications for funded services" simply means applications by clients for legal aid.[51]Moreover, for the amendments to have the meaning contended for by Miss Windsor, I would have expected the Explanatory Note to the Amendment No.2 Regulations to have said so, but it does not. I reach this view for the following reasons. In respect of cases litigated from 5 June 2000 onwards, it is the date of the application for legal aid that is crucial. For applications signed before 1st April 2000 and received by the LSC by 1st May 2000, S.18 of the Statute governs the law and Regulation 2 and 9-13 of the CLS Costs Regulations the procedures that apply; for applications signed on 1st April 2000 and thereafter it is the Cost Protection Regulations (given effect by S.11(3) of the Act) that govern the law and the CLS Costs Regulations the procedures. To my mind it would be illogical and inconsistent with what had gone before if, in respect of applications made on or after 3rd December 2001, the trigger was the date the receiving party applied for determination of his costs payable by the LSC, rather than the date the client applied for legal aid. Had such a volte face been intended, I consider the Explanatory Note would have made this clear, but as I have said, it does not.[52]It follows that I consider Miss Windsor’s interpretation of the amended Regulation 5(3)(b) is incorrect and she has not brought Yenula within the Amended Regulation. For that reason too, the preliminary issue must be answered in the negative.[53]If I am mistaken and the amended Regulation 5(3)(b) does apply and means an application made by the unassisted party after 3 December 2001, it is necessary to decide whether the three reasons advanced by Miss Windsor are "good reasons" for the delay. In my judgment, they are not. In essence they boil down to pressure of work and lack of familiarity with the Regulations, neither of which, in my opinion, are "good reasons". On the contrary, by the time Yenula’s application was made to this court on 13 September 2003, the Cost Protection Regulations had been in force for 2 years and the Amendment No.2 Regulations in place for over 9 months. In my judgment Yenula has not demonstrated a good reason for the delay and its application would fail on this ground too.[54]I am not satisfied, either, that because in certain cases, bills in matters in which the LSC are meeting the costs of the assisted person are permitted to be lodged late, is a valid reason for taking a generous view here. The CPR apply to such assessments whereas, on account of Rule 47.17, those Rules do not apply to the application before me. Accordingly, I derive no assistance from rules which are expressly stated not to apply to assessments of costs payable by the LSC against an unassisted party.[55]As to Miss Windsor’s alternative case that the "application for funded services" under Regulation 3 of the No.2 Amendment should be construed as including all applications for extensions to the certificate, I reject that argument too. In my judgment, the reference to "application" means the application for legal aid. Once that application is granted, it does not matter how many successful or unsuccessful applications are subsequently made for extensions, because costs protection by then will already be in place. I consider that it is the original application which is critical and not the dates upon which applications for extensions are made.[56]So far as the reference to Hansard is concerned, I agree with Mr Gimlette. The comfort which Miss Windsor sought to draw from the extracts she referred to me, I am afraid eluded me also. CONCLUSION[57]This is an "old" case to which the substantive law applicable is Section 17/18 of the Statute and not the Cost Protection Regulations. Of the Regulations implemented on 1 April 2000 and thereafter, only Regulations 2 and 9 to 13 of the CLS Costs Regulations apply. Under Regulation 10(2) the time limit for requesting a determination of any costs payable by the LSC is a mandatory three months. As the Cost Protection Regulations do not apply the amendment to Regulation 5(3)(b) introduced by the No.2 Amendment Regulations is of no assistance. The application is therefore out of time and the preliminary issue must be answered in the negative. THE NEXT STEPS[58]The parties are at liberty to apply to me about the costs of the preliminary issue and permission to appeal.

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