Lord Chancellor v Eddowes Perry and Osbourne Ltd [2011] EWHC 420 (QB)

Case No QB/2010/0504[2011] EWHC 420 (QB)IN THE HIGH COURT OF JUSTICEQUEEN'S BENCH DIVISIONON APPEAL FROM COSTS JUDGE SIMONSVenue Royal Courts of Justice, Strand, London, WC2A 2LLDate 02/03/2011
Before
THE HONOURABLE MR JUSTICE SPENCER
Between
THE LORD CHANCELLORAppellantEDDOWES PERRY AND OSBOURNE LIMITEDRespondent
Mr David Bedenham (instructed by the Treasury Solicitor) for AppellantMr Julian Berg (solicitor, and director of the Respondent) for RespondentHearing Hearing date: 16 th February 2011
Judgment

Introduction

[1]The question raised in this appeal is the proper interpretation and application of the Litigators’ Graduated Fee Scheme for cases in the Crown Court where a litigator has represented multiple defendants tried on the same indictment.[2]The Lord Chancellor (“the appellant”) appeals against the decision of Costs Judge Simons dated 2nd August 2010 by which he allowed the appeal of Eddowes Perry and Osbourne Limited (“EPO”) against the redetermination of their fees in a substantial criminal case, a redetermination which had led to the recoupment by the Legal Services Commission of £36,725.66 from the fees EPO had been paid.[3]EPO had represented seven out of twelve defendants tried at Birmingham Crown Court on an indictment alleging offences of riot and violent disorder. The trial lasted 26 days. EPO’s fees fell to be determined under the Litigators’ Graduated Fee Scheme contained in the provisions of Schedule 2 to the Criminal Defence Service (Funding) Order 2007 (“the Funding Order”). EPO duly submitted their claim for payment, but did so on the basis of four separate cases matching the four separate case numbers which had been allocated by the Crown Court to the defendants they represented. They were paid accordingly.[4]I emphasise at the outset that there is no suggestion, and never has been any suggestion, that EPO acted otherwise than with complete propriety in submitting the claims as they did. Indeed they did so having consulted the guidance published by the Legal Services Commission, and having checked with the relevant authority beforehand that this was how the claims should be processed. They were allowed and paid the sum of £53,104.91.[5]Some five months later, in the course of a nationwide root and branch review and audit by the Legal Services Commission (“the LSC”) of claims paid under the Litigators’ Graduated Fee Scheme, it was realised that, potentially at least, the determination had been wrong because the claim had been incorrectly assessed. The LSC took the view that the claim should have been treated as one single case, for which a single basic fee was payable with an uplift to reflect the number of defendants EPO represented. The amount properly payable on this basis was only £16,379.35. Thus the LSC sought to recoup the difference which had been overpaid, namely £36,725.66.[6]Costs Judge Simons upheld EPO’s appeal, concluding that there was a lack of clarity in the relevant statutory provisions which had to be resolved in EPO’s favour. The crux of his decision was that because EPO’s defendants had been allocated four case numbers their claim fell to be paid as four separate cases.[7]The appellant brings this appeal because a matter of principle of some importance arises. Article 31 provides the Lord Chancellor with a right of appeal if he is dissatisfied with a decision of a Costs Judge on an appeal from the determination of costs in a case such as this. Exceptionally, the Lord Chancellor is not required to obtain permission for such an appeal. However, it is axiomatic that the Lord Chancellor will only pursue an appeal in a proper case. As Sir Charles Gray, sitting as a Judge of the High Court, observed in Lord Chancellor v Rees and others [2008] EWHC3168(QB), at paragraph 7:
“… it appears to me to be incumbent on the Lord Chancellor in any appeal to the High Court to identify some question of law or of principle which arises, since the High Court would be slow to differ from the assessment of a costs judge on an issue of fact or judgment …”
[8]I am satisfied, and there is no dispute, that an important question of law and principle does arise in this case, namely the proper interpretation and application of the provisions of the Litigators’ Graduated Fee Scheme where a litigator has represented multiple defendants tried on the same indictment. Preliminary issues[9]A preliminary issue was raised before me as to the jurisdiction of Costs Judge Simons to hear EPO’s appeal, and consequently as to the status and propriety of this appeal. Although I am satisfied that no such difficulty in fact exists in the present case, it is a matter which I am told has been causing problems in other cases so it is right that I should address it briefly.[10]The right of the LSC to recoup sums overpaid derives from article 26 of the Funding Order which provides:
“(1) This article applies where a representative is entitled to be paid a certain sum (“the amount due”) by virtue of the provisions of Schedules 1, 2 or 4 and, for whatever reason, he is paid an amount greater than that sum. (2) Where this article applies, the appropriate officer may – a) require immediate repayment of the amount in excess of the amount due (“the excess amount”) and the representative must repay the excess amount to the appropriate officer; or b) deduct the excess amount from any other sum which is or becomes payable to the representative by virtue of the provisions of Schedules 1, 2 or 4.” a) require immediate repayment of the amount in excess of the amount due (“the excess amount”) and the representative must repay the excess amount to the appropriate officer; or b) deduct the excess amount from any other sum which is or becomes payable to the representative by virtue of the provisions of Schedules 1, 2 or 4.”
[11]In the present case the LSC wrote to EPO on 8th March 2010 drawing their attention to this potential overpayment and indicating that if the LSC did not hear from EPO by 19th March 2010 seeking a review of this decision “in accordance with article 29 of the Funding Order”, the LSC would proceed to make the recoupment. Article 29 gives a right to a litigator to apply to the appropriate officer to redetermine his fees if he is dissatisfied (inter alia) with “the calculation by the appropriate officer of the fee payable to the litigator in accordance with Schedule 2 …”. By letter dated 16th March 2010 EPO informed the LSC that they had made full investigation of the matters in question and served the relevant prescribed form LF2 seeking a review of the LSC’s decision.[12]By letter dated 19th April 2010 the LSC responded in detail, standing by the decision they had reached and the redetermination that had been made. The letter concluded by informing EPO of their right to appeal the decision in accordance with article 30 of the Funding Order.[13]The problem that has arisen in practice in other cases, and potentially arose in this case, is that article 29 does not provide in terms for a right on the part of the litigator to appeal against a decision to recoup sums overpaid. It provides only a right to apply to “redetermine” fees where the litigator is dissatisfied with the calculation made by the appropriate officer of the fees payable to the litigator in accordance with Schedule 2. In the present case EPO were, of course, not dissatisfied with the original determination (which is the determination article 29(1)(c)(i) envisages) but with the subsequent decision to recoup the alleged overpayment. Thus it was arguable that no right of redetermination arose under article 29, and thus no right of appeal to a Costs Judge under article 30 against such a redetermination. This argument prevailed before Costs Judge Gordon-Saker in the case of R v Charlery and R v Small (SCCO Ref: 204/10 and 205/10,) 26th November 2010.[14]I am satisfied that in fact no such technical problem arises in the present case on proper analysis of the sequence of events. The decision to seek recoupment, pursuant to article 26, itself involved a redetermination or reassessment by the LSC of the fees payable. That, in reality, is the determination with which EPO were “dissatisfied” and in respect of which they were thus entitled to apply for a redetermination. They did so by serving on the LSC Form LF2 seeking a review. The LSC, by their letter of 19th April 2010, effectively confirmed, by way of redetermination pursuant to article 29(7), the amount previously determined as liable to be repaid by way of recoupment. From that redetermination EPO had a right of appeal to a Costs Judge pursuant to article 30(1).[15]I was informed at the hearing that in order to avoid such technical difficulties in other cases, the LSC sensibly proposes to change the wording of its letter to litigators in circumstances such as these, so that the litigator is formally invited to request a redetermination where they disagree with the LSC’s reassessment, leading to a formal redetermination with written reasons under article 29 which in turn can trigger an appeal to a Costs Judge under article 30.[16]Mr Julian Berg, on behalf of EPO, did not submit that the appeal procedure in this case was flawed. It would be strange indeed, and wholly unsatisfactory, if litigators in the position of EPO who found themselves facing recoupment had no right of appeal or review within the provisions of the Funding Order itself. Mr Berg does not submit, of course, that Cost Judge Simons lacked jurisdiction to allow EPO’s appeal: quite the reverse. He submits that the decision of Costs Judge Simons was correct.[17]It follows that I am satisfied that I have jurisdiction to determine this appeal. Should that view prove erroneous, with the consequence that the decision of Costs Judge Simons was made without jurisdiction, the conclusion I have reached on the merits of the appeal as to the proper interpretation of the Funding Order will, I trust, nevertheless be of assistance to those who have to operate the Litigators’ Graduated Fee Scheme.[18]The test I have to apply in determining this appeal is the same test as for any civil appeal. It is for the appellant to demonstrate that the decision of the Costs Judge was plainly wrong. Adopting again the observations of Sir Charles Gray in Lord Chancellor v Rees, at paragraph 8 of the judgment, I bear in mind that:
“… an appellate court should only interfere when they consider that the judge of first instance has not merely preferred an imperfect solution but has exceeded the generous ambit within which a reasonable disagreement is possible …”
[19]I sat to hear this appeal with an assessor, Mr Anthony Engel. I was also to sit with a second assessor, Costs Judge Campbell, but it was realised at the outset of the hearing that he had himself given a decision on the very point at issue in this appeal. Consequently, even though the role of an assessor is confined to assisting the judge and even though an assessor takes no part in the decision itself, it was inappropriate for him to take any part in the appeal and he withdrew. The relevant background[20]It is necessary to explain how the twelve defendants who stood trial on the same indictment in this case at Birmingham Crown Court came to be allocated different case numbers. For security reasons, the twelve defendants appeared at Solihull Magistrates’ Court in two batches on consecutive days. All were “sent” to the Crown Court for trial pursuant to Section 51 of the Crime and Disorder Act 1998. There was never any question that they would not all be tried on the same indictment.[21]For purely administrative reasons, which defy any logic, the Crown Court generated no fewer than eight separate “T numbers” for the twelve defendants. Of the seven defendants whom EPO represented, three were allocated their own separate T number. The remaining four were allocated another T number jointly.[22]This is, apparently, a consequence of the CREST computerised case management system which operates at all Crown Courts in England and Wales. These T numbers, once allocated, can apparently never be changed. This explains the common phenomenon one sees in the daily listing of multi-handed trials where a single indictment against a number of defendants will appear on the court list day after day as the trial proceeds, as if the court were hearing a succession of different cases. Nothing, of course, could be further from the truth.[23]As to why, if there were to be separate T numbers allocated at all, there were not twelve separate numbers, one can only speculate. It may be that the papers relevant to four of EPO’s clients arrived in the Crown Court office at the same time and were processed at the same time, hence the allocation of one and the same T number to those four defendants. It is quite clear and common ground, however, that the allocation of T numbers to the different defendants in this case was purely random and bore no relation to any evidential or procedural feature of the case.[24]Thus it was that when the indictment in the case was signed, alleging a count of riot and a count of violent disorder against all twelve defendants, all eight different T numbers appeared on the face of the indictment.[25]Each of the seven defendants whom EPO represented had separate counsel, and one of the seven was represented by leading and junior counsel. Some of the defendants EPO represented were acquitted, some convicted.[26]At the conclusion of the Crown Court trial, EPO had to submit a claim for payment of their fees pursuant to the provisions of the Funding Order. Article 6 of the Funding Order provides as follows:
“(1) Claims for fees by litigators in proceedings in the Crown Court must be made and determined in accordance with the provisions of Schedule 2 to this Order.”
This makes it very clear that, as a matter of law, it is the provisions of Schedule 2, and nothing else, which prescribes how any such fee claim is to be determined. I shall return to this fundamental point in dealing with the relevance of guidance issued by the LSC.[27]Schedule 2 creates and sets out a comprehensive Litigators’ Graduated Fee Scheme. It covers all proceedings in the Crown Court, and not merely cases tried on indictment. The essence of the Scheme is that instead of remuneration based on a bill of costs reflecting the time actually spent and work actually done on the case, remuneration is calculated by reference to a basic fee for the case, enhanced to reflect in the broadest sense the size and complexity of the case by reference to the volume of prosecution papers. Where a litigator represents more than one defendant, the Scheme provides for an uplift on the basic fee. Where the total number of defendants represented by the litigator is between two and four, the uplift on the basic fee is 20%. Where the total number of defendants represented by the litigator is five or more, the uplift is 30%. I shall return to the precise definitions.[28]The seven defendants represented by EPO had, between them, four different case numbers. In respect of the four defendants sharing the same case number EPO submitted a single claim, including the appropriate uplift of 20% to reflect the fact that there were four defendants covered by that claim. For each of the other three defendants whom they represented EPO submitted a single claim, no defendant uplift being applicable.[29]Prior to submitting the four claims in this form EPO consulted the Litigator Graduated Fee Scheme Guidance issued by the LSC. It did not deal specifically with this situation. EPO also contacted the Nottingham office of the LSC, to which the claims were to be submitted, and also sought guidance from a Legal Services Commission helpline. The advice EPO received from these various sources confirmed the view of EPO’s own costs draftsman that four separate claims should be submitted because their seven defendants had between them four separate case numbers.[30]The “appropriate officer” for the purpose of the Funding Order, that is to say an officer employed by the LSC, duly processed the four claims and authorised payment as requested. The claims were duly paid in October 2009.[31]The nationwide review by the LSC which led to the discovery of the alleged wrong basis of payment in the present case was described in the LSC’s letter to EPO of 8th March 2010 as follows:
“A review of payments made under LGFS is currently underway to provide assurance that we operate sufficient financial control and that all claims paid fall within the rules of the scheme.”
The relevant provisions of the Litigators’ Graduated Fee Scheme[32]Paragraph 2(1) of Schedule 2 to the Funding Order provides that the Schedule applies to “every case on indictment”, as well as to specified “proceedings in the Crown Court” and to specified “hearings”.[33]The word “case” is defined in the interpretation provisions contained in paragraph 1 of Schedule 2. Paragraph 1(1) provides as follows: “In this Schedule – “case” means proceedings in the Crown Court against any one assisted person – a) on one or more counts of a single indictment; b) arising out of a single notice of appeal against conviction or sentence, or a single committal for sentence, whether on one or more charges; or c) arising out of a single alleged breach of an order of the Crown Court and a case falling within paragraph (c) must be treated as a separate case from the proceedings in which the order was made …” a) on one or more counts of a single indictment; b) arising out of a single notice of appeal against conviction or sentence, or a single committal for sentence, whether on one or more charges; or c) arising out of a single alleged breach of an order of the Crown Court[34]This definition of the word “case” has been a source of confusion in the proper interpretation of the Scheme. At first sight it might be thought to imply that there can never be more than one defendant in a case. Mr Bedenham, on behalf of the appellant, submits that this definition covers a single defendant case as the basic model, and that it is upon this model that the later provisions in paragraph 9 for defendant uplifts are grafted in order to cover multi-defendant cases. I accept that submission.[35]An alternative approach, leading to the same conclusion, would be to interpret the phrase “against any one assisted person” as meaning “against someone who is an assisted person”, to distinguish the position of a defendant who is a non-assisted person, either because he is unrepresented altogether or because he is privately represented. On such an interpretation the definition of “case” would simply confirm that for the purpose of the Scheme a “case” requires at least one assisted person.[36]What is clear from sub-paragraphs (a), (b) and (c) of paragraph 1 is that the emphasis is on a single indictment, single notice of appeal, single committal for sentence and single alleged breach of an order. In other words, in identifying the “case” for which remuneration is claimed, the focus is on the machinery by which the proceedings in the Crown Court are initiated and/or determined: indictment, notice of appeal, committal for sentence or breach of an order. If, therefore, a defendant faces two separate indictments there are two separate “cases”, for each of which the litigator is entitled to separate remuneration. It is elementary, of course, that a defendant can only be tried on one indictment at a time.[37]This focus on a “single indictment” is, in my judgment, the key to the proper construction of the Scheme where there are multiple defendants on that single indictment. The definition of “case” in paragraph 1(1) of the Schedule cannot possibly lead to the conclusion that if a litigator represents seven defendants charged and tried on the same indictment that litigator is entitled to be paid on the basis of seven separate cases, each calculated identically, producing remuneration totalling seven times the amount the litigator would be paid for representing just one of those defendants. Such an interpretation would not only be nonsensical but would make wholly redundant the concept of and requirement for “defendant uplifts” provided for in the Scheme. It is to the provisions defining “defendant uplifts” that I next turn.[38]The operative provisions of the Schedule which specify the calculation of the total fee payable to the litigator (paragraphs 5, 6, 7 and 8) in various eventualities (e.g.trial, cracked trial or guilty plea) specify, in each eventuality, that the total fee will include “the defendant uplift, if any, calculated in accordance with the table following paragraph 9 …”. Paragraph 9 of Schedule 2, headed “Defendant uplifts” provides as follows: “(1) The defendant uplift payable to a litigator will be calculated in accordance with the table following sub-paragraph (3). (2) Only one defendant uplift will be payable in each case. (3) In the table following this paragraph, the total fee means [complex provisions are then set out]. Defendant Uplifts Total number of defendants represented by litigator Percentage uplift to total fee 2-4 20% 5+ 30%[39]The defendant uplift applies only to proceedings in the Crown Court on indictment, hence the provision in the table that the percentage uplift applies to the “total fee”. The words omitted in the quotation from paragraph 9(3) above set out in detail the calculation of the “total fee” by reference to basic fee, page count and various other “proxies”. It is clear that the phrase “payable in each case” in paragraph 9(2) means “payable in respect of each indictment” in multiple defendant trials.[40]For completeness it should be noted that the definition of “case” in paragraph 1(1) of Schedule 2 is identical to the definition of “case” in paragraph 1(1) of Schedule 1 which contains the equivalent and complementary Advocates’ Graduated Fee Scheme. Different rules apply in that Scheme for remuneration where an advocate has represented more than one defendant or has represented a defendant or defendants in more than one case. Those provisions are contained in paragraph 22 of Schedule 1. Paragraph 22(2) provides:
“Where two or more cases to which this Schedule applies involving the same trial advocate are heard concurrently (whether involving the same or different assisted persons) – a) the trial advocate must select one case (the “principal case”), which must be treated for the purposes of remuneration in accordance with this Schedule; b) in respect of the main hearing in each of the other cases the trial advocate must be paid a fixed fee of 20 percent of [the basic fee] for the principal case … or c) the fixed fee for the principal case …”
The concept envisaged in paragraph 22(2) of “two or more cases … involving the same trial advocate heard concurrently” might at first sight be thought to contradict the approach I have found to be appropriate in construing the provisions of the equivalent Litigators’ Graduated Fee Scheme in Schedule 2. However, paragraph 22(2) is not envisaging that in the trial of a multi-defendant indictment two or more cases are heard concurrently. Rather it is envisaging, for example, that at the same hearing a defendant may be sentenced or otherwise dealt with on more than one indictment, or for a committal for sentence as well as an indictment. Thus there is no conflict between the interpretation of the word “case” in Schedule 1 and its interpretation in Schedule 2. Even if there were such a conflict, the provisions of Schedule 2 must be construed independently from Schedule 1 and as creating a coherent whole Scheme. Case numbers a) the trial advocate must select one case (the “principal case”), which must be treated for the purposes of remuneration in accordance with this Schedule; b) in respect of the main hearing in each of the other cases the trial advocate must be paid a fixed fee of 20 percent of [the basic fee] for the principal case … or c) the fixed fee for the principal case …”

Case numbers

[41]Nowhere in the provisions of Schedule 2 (or in the Funding Order generally) is there any mention of case numbers, i.e. the “T” numbers allocated to a case by the CREST case management system at the Crown Court. For the reasons already explained the allocation of case numbers is a purely administrative act which cannot conceivably have any bearing upon the proper interpretation of the Scheme provided for in Schedule 2. No doubt it has been convenient administratively for fee claims to be processed by reference to case numbers but, as the present appeal demonstrates, the allocation of case numbers can be and often is entirely random, bearing no relation to the realities of the form in which the proceedings on indictment take place or the way in which the litigator prepares for those proceedings.[42]It follows that there is no justification whatsoever for treating as the touchstone for the basis of remuneration the case numbers randomly allocated at the Crown Court as a purely administrative function. It appears that it was by pure chance that EPO found themselves representing four of their defendants under one case number, and their other three defendants under three separate case numbers. The proper calculation and payment of substantial public funds cannot be governed by chance.[43]As Mr Berg acknowledged in the course of argument, there are in reality only three options for the construction of the relevant provisions in the situation which arose in this appeal. The first is that EPO were entitled to be paid seven separate basic fees because each was a separate “case”. Mr Berg rightly concedes that this would be a nonsense, as did the Costs Judge below, because it would render the whole concept of defendant uplifts redundant. The second option, favoured by the Costs Judge below, is that for purely practical reasons a “case” should equate to the case number the Crown Court has allocated to one or more defendants. For the reasons already explained, this has no conceivable justification as a matter of construction of the statutory provisions and must be rejected.[44]The third and only remaining option is the plain and obvious interpretation that the litigator is entitled to one basic fee (enhanced by the various proxies to the “total fee payable”) plus the prescribed defendant uplift according to the total number of defendants represented. I have no hesitation in concluding that this is the correct interpretation. The Litigator Graduated Fee Scheme Guidance[45]This Guidance was first issued by the LSC on 14th January 2008, and has gone through at least seven re-issues. Paragraph 1.10 of the version current at the material time stated:
“The guidance contained in this document is only the recommended line to take and does not take away the responsibility of the appropriate authority (i.e. LSC) to determine claims as they see fit and in accordance with the regulations”
. This correctly states the position. As Sir Christopher Holland (sitting as a High Court Judge) emphasised in Lord Chancellor v Purnell [2009] EWHC 3158(QB) at paragraph 6:
“The Graduated Fee Scheme Guidance is not a source of law. It is no more and no less than “Guidance”...”
In that case Sir Christopher Holland, having reached his view on the correct construction of the Graduated Fee Scheme Guidance, “took comfort” from certain aspects of the Guidance. It did not, however, form part of the reasoning for his construction of the Scheme, nor could it. In the present appeal I derive little assistance from the Guidance in force at the material time (30th September 2009 re-issue). However, as it was referred to extensively in the submissions before the Costs Judge below and before me, it is right to address it.[46]Under the heading “Number of Defendants” the Guidance provided:
“3.51 Litigators must claim the number of legally aided defendants represented by the litigator firm on the case. 3.52 Where defendants are joined to or severed from a case, providers should claim for the number of defendants they are representing for each particular case.”
[47]Under the heading “Joined/Severed cases” the Guidance provided:
“3.53 A case is defined as proceedings against a single person on a single indictment regardless of the number of counts. If counts have been severed so that two or more counts are to be dealt with separately, or two defendants are to be dealt with separately, or if two indictments were committed together but dealt with separately, then there are two cases and the litigator may claim two fees. 3.54 Conversely where defendants are joined so that one case number is adopted for the case, a claim should only be made under that case number and not for earlier aborted case numbers.”
[48]The guidance in these paragraphs does not address specifically the point at issue in this appeal. Paragraph 3.53 inaccurately recites the definition of a case: paragraph 1(1) of Schedule 2 uses the phrase “against any one assisted person” not “against a single person”. It also refers inappropriately to the possibility that “two indictments were committed together”, which is a legal and procedural impossibility. Presumably it was intended to mean that two defendants were committed jointly for trial but were proceeded against on separate indictments.[49]It is only paragraph 3.54 of the Guidance which conceivably had any relevance. Unfortunately, however, it was based upon a misunderstanding of the practicalities of the CREST system because it envisaged that if defendants are joined (e.g. in one indictment) a single case number is adopted. As this appeals demonstrates, that is precisely the opposite of what happens in practice. Paragraph 3.54 did, however, at least seem to confirm the principle that where defendants are joined in one indictment, one claim and one claim only should be made by that litigator in respect of that indictment.[50]On 1st April 2010 the LSC reissued the Guidance in a substantially amended form which makes it clear that, in a situation such as the present appeal, there should be a claim for one case with defendant uplifts. Under the heading “Number of Defendants” paragraph 3.32 provides (replacing paragraph 3.51 in the previous Guidance quoted above):
“Where a litigator represents two or more legally aided defendants on the same case, they must submit one claim and the defendant uplift.” “3.35. Conversely where defendants are joined or a single defendant who has been committed separately for matters that are subsequently joined so that one case number is adopted for the case, a claim should only be made under that case number and not for earlier aborted case numbers.” 52. However, a new paragraph 3.36 spells the matter out much more clearly: “A case may be considered joined where two or more defendants or two or more cases for a single defendant have some or all of the following identical characteristics on the court records: • PPE • Offence type • PCMH date • Other hearing dates • Trial dates • Sentence hearing date”
. I was told in the course of submissions that there has been yet a further reissue of the Guidance which corrects the error in relation to the capability of the CREST system to generate a single case number in a multi-handed case such as this. • PPE • Offence type • PCMH date • Other hearing dates • Trial dates • Sentence hearing date”.

The Reasons given by the Costs Judge below

[51]Although I have already made clear that my construction of the relevant provisions of the Scheme leads to a different conclusion from that reached by the Costs Judge below, in order to succeed in this appeal the appellant must demonstrate that the decision of the Costs Judge below was plainly wrong. I therefore turn to the reasons he gave in his judgment.[52]Costs Judge Simons was clearly very sympathetic to EPO on the merits of their appeal. The LSC did not appear at the appeal before him, relying on their written submissions. The hearing was fairly short (about half an hour, Mr Berg told me). The Costs Judge reserved his decision and gave written reasons.[53]Having set out the factual history, he said at paragraph 15:
“There is no reference in the Regulations to case numbers, so one has to go back to the definition of “case”, which is proceedings in the Crown Court against any one assisted person on one or more counts of a single indictment. It could therefore be argued that there would always be a separate case for each defendant in multi-defendant cases. However, if that was the situation, then the incorporation of the defendant’s uplift provisions in the Regulations would not make any sense because they would be redundant.”
That conclusion is plainly correct, and effectively disposes of any argument that the wording of paragraph 1(1) somehow justifies the approach which ultimately prevailed before the Costs Judge.[54]At paragraph 16, he said:
“Conversely, there is nothing in the Regulations to indicate that where there are a number of defendants on a single indictment, that must mean that there is one case. Indeed that could not be right if each of the defendants decided to instruct separate litigators.”
Although it is correct that the provisions of Schedule 2 do not expressly state that where a number of defendants are charged on a single indictment that is to be treated as one “case”, for the reasons already explained that can be the only proper interpretation of the Scheme. As to the final sentence of this paragraph, there is in fact no contradiction. Where separate litigators act for different defendants on the same indictment each litigator is claiming in respect of his defendant or defendants only, and thus is entitled to remuneration for that “case”.[55]At paragraph 17, he said:
“This lack of clarity in the Regulations appeared to be have been sensibly resolved by the oral guidance given to the solicitors by the Legal Services Commission, which was simply that a separate claim could be made for each separate case number.”
As a matter of law no oral guidance given to solicitors by the LSC could supplant or override the terms of the Scheme itself.[56]At paragraph 18 he said:
“The only assistance that I can obtain from the 30th September 2009 Litigator Graduated Fee Scheme [Guidance] is in paragraph 3.54 which indicates that where one case number is adopted for a case, a claim shall only be made under that case number and although this does not appear to be directly on this particular point nevertheless it is an indication that there should be one claim for one case number.”
For the reasons already explained written guidance cannot supplant or override the proper interpretation of the statutory provisions. In any event, if anything paragraph 3.54 pointed to the opposite conclusion, namely that if all the defendants were joined on a single indictment, it should be treated as one case.[57]Paragraph 19 is the crux of the decision of the Costs Judge . He said:
“In my judgment, where the Court allocates a case number to a case, that is a case within the definition that is given in the Regulations, so that inthis particular matter there are four cases. Certainly, the court’s methodology in this matter defies any sort of logic; why were there three individual cases and one case with four defendants? These are matters that the Legal Services Commission must sort out with the Crown Courts, but until they do so, solicitors are entitled to proceed on the basis of a literal interpretation of the Regulations.”
For the reasons already explained in this judgment, the conclusion that there were four cases because the Crown Court had allocated four case numbers is plainly wrong. The allocation of case numbers, which can be purely random, has no bearing on the proper construction of the provisions of the Scheme as it applies to multiple defendants tried on the same indictment. Furthermore it was wrong to suggest that this approach of equating “cases” with case numbers accords with “a literal interpretation of the Regulations”. It does not. At best this could be a reference to paragraph 1(1) and the definition of “case”, but the Costs Judge had, quite correctly, already rejected that “literal interpretation”.[58]At paragraph 20 he said:
“It is apparent that the Legal Services Commission were concerned about the lack of clarity, both in the Regulations and in their Guidance, by the fact that there is an amendment in April 2010 which incorporated the new paragraph 3.36, which although provides further clarification, it does not deal specifically with this particular issue.”
The further Guidance, like the previous Guidance, can have no bearing on the proper construction of the statutory provisions. In fact, however, the new paragraph 3.36 does address this particular issue. Indeed, Mr Berg confirmed that had this Guidance been available at the time the claim was submitted, the position would have been quite clear. A single claim would have been submitted, with appropriate defendant uplifts.[59]At paragraph 21 he said:
“I do not agree with the implication made by the LSC that the solicitors have received a windfall. As Mr Berg submitted, each of the pages of prosecution evidence had to be read in conjunction with each of the seven defendants whose cases were different, as is made clear by the fact that three of the defendants were acquitted.”
This paragraph formed no part of the Costs Judge’s reasoning. I agree it is unhelpful and inappropriate to speak of windfalls. No one has suggested that all necessary work was not conscientiously carried out. But that cannot affect the proper construction of the statutory provisions where Parliament has prescribed the basis upon which the fees payable are to be calculated, determined and paid.[60]It follows that the appellant has satisfied me that the judgment of the Costs Judge below was plainly wrong and cannot stand. Unfairness[61]Mr Berg feels understandably aggrieved on behalf of EPO that having submitted their claims in accordance with their understanding of the Scheme, following advice from the LSC, and those claims having been determined by the LSC on that basis, EPO now find the LSC taking a contrary view without any change of circumstances. In consequence EPO face the recoupment of a very substantial sum which any solicitors’ practice could ill afford to lose, particularly in the current economic climate.[62]Mr Berg submits that it is wrong that EPO should be penalised in this way. The short answer to that point, however, is that if on a proper construction of the provisions of the Scheme EPO were overpaid in the first place, it cannot be said that they have been penalised in having to repay the sum which should never have been allowed in the first place. The wording of article 26 is extremely broad. The LSC is entitled to recoupment when there has been overpayment “for whatever reason”. This must include overpayment through the LSC’s own error.[63]I was impressed by the frankness and moderation of Mr Berg’s submissions on unfairness. He confirmed that there was no question in this case of EPO deciding to take on representation of all seven defendants only because they were assured of remuneration on the basis they eventually received. In other words Mr Berg did not suggest that there were grounds for any form of estoppel (which could not in any event defeat the provisions of a statute) by which in reliance upon an assurance that the claim would be paid in a particular way, EPO acted to their prejudice in continuing to represent all seven defendants. Mr Berg confirmed that the question of how the claim would be paid arose only after the conclusion of the trial. Indeed, Mr Berg went further in acknowledging, very properly, that even if he had been aware of the way in which the fees would ultimately be assessed, EPO would probably have still retained all seven defendants as their clients. Experienced criminal solicitors such as EPO would always be reluctant to send clients to other solicitors, even if there was no financial reward for retaining more than five defendants. Criminal solicitors take a long view and work on the basis that their services may be required again by a client, or by others whom a satisfied client will recommend. Conclusion[64]For all these reasons I reach the clear conclusion that the decision of Costs Judge Simons cannot stand and that the Lord Chancellor’s appeal must succeed. In a case such as this where a litigator has represented multiple defendants tried on the same indictment, a single claim for the case must be submitted, and the defendant uplift applied in accordance with paragraph 9 of Schedule 2.[65]I am fortified in this conclusion by the decision of another Costs Judge, Master Campbell, on the same point in an appeal heard on 27th September 2010, only a few weeks after the decision of Costs Judge Simons: R v Hackett and Kavaliauskas SCCO Ref: 34/10 and 35/10. In that case the solicitors had submitted two separate claims for the two defendants whom they represented even though they were co-defendants in the same case and tried together. The same argument involving indictment numbers arose because of the way in which the defendants had reached the Crown Court. At paragraph 16 of his judgment, Costs

Judge Campbell said:

“Having considered these points, I cannot agree with [counsel’s] submissions in relation to the T numbers. It is common ground in this appeal that there was one indictment contain two counts which named both Hackett and Kavaliauskas as co-defendants, albeit that they each retained their original T numbers from start to finish. What the pair were not doing [was] sitting in the same dock facing separate indictments with different T numbers. Had that been the case, I would have agreed with [counsel] that one fee for each defendant would have been due, which appears to be the situation contemplated by paragraph 3.53 of the Guidance (albeit that such Guidance is not a source of law). However that was not the position and where, as here and simply for administrative reasons, the two defendants for whom the appellant acted had been allocated separate T numbers, that does not in my judgment give rise to an entitlement to payment of a separate fee for each where they faced one identical indictment. Were that to be the case, no purpose would be served in the Scheme having a provision for a second defendant uplift to be paid where a litigator firm acts for two defendants on an indictment on which both are named, the position here. For these reasons I consider that the LSC reached the correct decision and the appeal fails on this point.”
Costs[66]At the end of argument, I raised the question of costs should the appeal be resolved in the Lord Chancellor’s favour. Normally costs would follow the event, and the Lord Chancellor has succeeded in this appeal. However, I am entitled to have regard to the overall fairness of this case in determining costs. Through no fault of their own EPO submitted their claims incorrectly in a form in which they had been encouraged by the LSC to do so. The LSC then determined their claims on that same incorrect basis. Having reviewed the matter, as they were entitled to do for the protection of public funds, the LSC invited EPO to challenge the redetermination if they saw fit, which they did. Although the LSC had a right to attend the hearing of the appeal before Costs Judge Simons and make representations, they chose not to. Had the LSC appeared and succeeded, I very much doubt that they would have been awarded their costs. The Lord Chancellor has brought these proceedings to establish an important point of principle as much as to ensure that the sum overpaid to EPO is in fact recouped.[67]In all these circumstances the just outcome is that there should be no order for costs on this appeal. Furthermore, although I quash the decision of Costs Judge Simons insofar as he directed that no recoupment should be made by the LSC, I leave in place his order for costs in the proceedings before him. In other words his order for costs in EPO’s favour in the sum of £500 (plus VAT), together with the sum of £100 EPO paid as a fee for the appeal, still stands and those costs will still be met by the Lord Chancellor.[68]I am grateful to Mr Bedenham and Mr Berg for their written and oral submissions. I repeat and emphasise that the outcome of this appeal implies no criticism of EPO for the course they took in submitting the claims as they did. Mr Berg has, if I may say so, conducted himself on behalf of EPO in a manner which does great credit to him, to EPO, and to his colleagues in the profession who continue to provide a high quality of service to the public despite the austerity of the new funding constraints.[69]Finally I express my gratitude to Mr Engel who sat with me as an assessor. I am gratified that the conclusion I reached is one with which he entirely concurred. I emphasise, however, that this judgment is, as it should be, my own.

Cited in 2 later judgments