Costs – Paper applications – Protective costs orders – Setting aside – Application of principles for making orders – Procedure in Court of Appeal

R (on the application of Compton) v Wiltshire Primary Care Trust: CA (Civ Div) (Lords Justice Waller, Buxton, Smith): 1 July 2008

The appellant primary care trust appealed against a decision ((2007) EWHC 2769 (Admin)) not to reconsider a protective costs order in favour of the respondent (C), and both C and the trust appealed against a protected costs order made in related ­proceedings.

C had obtained ­permission to apply for judicial review of a decision by the trust to close a day hospital facility at one of its hospitals. C also obtained, on a paper application, a protective costs order that the trust should not be ­entitled to recover costs against her, and which also capped the costs that C could recover from the trust. The trust appealed but a judge refused to reconsider the protected costs order because the trust had shown no ­compelling reasons for ­reconsideration.

In separate proceedings, C had also obtained permission to apply for ­judicial review of a decision to close the minor injuries unit at the same hospital. A protective costs order was made that C should not be permitted to recover her costs from the trust and capping the costs that the trust could recover from C. The trust argued that (1) as a local dispute about the closure of a local hospital did not raise an issue of ‘general public importance’ or one that the public interest required resolving, the criteria set out in R (on the application of Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192, [2005] 1 WLR 2600 for making a protective costs order had not been satisfied, and further that such orders should only be made in exceptional cases; (2) an application on paper for a protective costs order was an ­application that the parties had agreed could be disposed of without a hearing under r.23.8(c) of the Civil Procedure Rules (CPR) so that the trust had a right to apply to have the order set aside or varied, and there was no requirement for there to be compelling reasons, and the court in Corner House had overlooked the CPR and had invented a procedure that was inconsistent with them and unfair on the defendant.

Held: (Buxton LJ dissenting) (1) When considering whether a ­protective costs order should be granted, the two-stage tests of general public importance and the public ­interest in the issue being resolved were difficult to separate. The criteria set out in Corner House were not to be read as statutory provisions or read in an over-restrictive way, Corner House followed, R (on the application of Bullmore) v West Hertfordshire Hospitals NHS Trust [2007] EWHC 1350 (Admin) applied.

The criterion that the issues raised had to be of ‘general’ public ­importance did not mean that they had to be of interest to all the public nationally. Exceptionality was not an additional criterion but a prediction as to the effect of applying the principles of Corner House. When deciding the terms of the order in a case where a party sought to represent others, the court was entitled to take into account whether the others had the means to support the action. The jurisdiction to grant a protective costs order was concerned with enabling actions to be brought and was concerned to hold the balance so far as it could between the parties. In the present case, where C was bringing an action to obtain ­resolution of issues as to the closure of parts of a hospital that affected a wide community, and where that ­community had a real interest in the issues that arose being resolved, it had been open to the judge to find that there was a public interest in ­resolution of the issues and that the issues were ones of general public importance. (Per Smith LJ) As a matter of common sense, justice and proportionality, when exercising his discretion whether to make an order and if so what order, the judge should take account of the fullness of the extent to which the applicant had satisfied the five criteria in Corner House.

(2) Whether a protected costs order considered on paper fell within rules 23.8(b) or (c) of the CPR was irrelevant to the test on an application for ­setting aside or variation. A defendant had a right to apply to set aside, vary or discharge a protective costs order, but as the defendant had an ­opportunity to put its points on paper to the judge, it would require ­compelling reasons to alter the order made. The procedure laid down in Corner House was not unfair to a defendant. There was an analogy, albeit imprecise, with CPR r.52.9. In the present case, there were no compelling reasons to set aside the order. (3) (Per curiam) The procedural guidelines in Corner House should be followed in the Court of Appeal.

If the recipient of the protective costs order in the court below was wishing to appeal, an application for an order should be lodged with an application for permission. The respondent should have an opportunity of ­providing written reason why an order was appropriate. The decision would be taken on paper by the single Lord Justice. If an order was refused the applicant could apply orally. If it was granted then a respondent would need compelling reasons to set it aside. On appeals from refusal to grant an order, or against an order, the matter should be dealt with by the single Lord Justice on paper and the normal order should be no order for costs save in exceptional circumstances.

Appeals dismissed.

Philip Havers QC, Jeremy Hyam (instructed by Capsticks) for the appellant; Neil Garnham QC, Guy Opperman, Mathew Gullick (instructed by the Bar Pro Bono Unit) for the respondent; Ben Jaffey, Naina Patel (instructed by the in-house solicitor) for the intervener.