Costs


Conditional fee agreements - costs - professionals - success fees - material departure

(1) Kelvin Fosberry (2) Barbara Fosberry (3) BJ Rice & Associates v Revenue & Customs: ChD (Mr Justice Mann): 25 May 2007

The appellants (F) appealed against a decision that a conditional fee agreement (CFA) entered into with financial advisers (B) to cover a VAT appeal did not comply with the Conditional Fee Agreements Regulations 2000.



B were chartered tax advisers and accountants who acted for F in their appeal to the VAT and Duties Tribunal against its refusal to register them for VAT purposes. B acted pursuant to a CFA with F, however the Revenue & Customs Commissioners withdrew from the appeal and undertook to pay F's reasonable costs. The CFA provided for a standard charging rate and a capped sum if the appeal was unsuccessful. In the event that the appeal was successful, the agreement provided for a 55% uplift with no cap on the amount recoverable.



At the costs hearing, the master found that the CFA was unenforceable. On appeal, B was joined to the proceedings on the basis that they had the primary interest in the appeal, namely whether they would receive costs for the work done on the VAT appeal. The master found that the CFA did not comply with regulations 2 and 4 of the regulations. B argued that the master had erred and that the purpose of the agreement was to ensure that where the lower amount payable applied, the amount was protected by the agreement. The commissioners submitted that the CFA not only failed to comply with the regulations on the issues identified in the master's ruling, but also in relation to the prescribed uplift on a successful appeal.



Held, CFAs were governed by section 58 of the Courts and Legal Services Act 1990 that set out the various requirements applicable to the enforcement of every agreement. The agreement drawn up by B clearly had several deficiencies and had plainly not been the work of a lawyer.



However, the question for the court was whether any departures from the regulations or a requirement under section 58 had a materially adverse effect on the protection of the client or on the proper administration of justice. A literal departure did not always mean that an agreement was non-compliant, as a minor or trivial breach was insufficient to render an agreement unenforceable, Hollins v Russell [2003] EWCA Civ 718, [2003] 1 WLR 2487 considered. Further, there could be a material breach of the regulations sufficient to render an agreement unenforceable, even in the absence of detriment to a particular client, Myatt v National Coal Board [2006] EWCA Civ 1017, [2007] 1 WLR 554 considered. In the present case, B had erred in his analysis of the provisions and the paragraph of the agreement he sought to rely upon did not have effect.



The CFA was deficient in two ways. Firstly, the commissioners were correct in their assertion that the uplift identified in it failed to comply with regulation 3. The uplift purported to reflect time and delay risks that attached to the VAT appeal, but failed to specify what element of the 55% applied to it. Secondly, there was only one paragraph of the CFA that came close to compliance, but it too fell short of the required standard. The wording of the agreement failed to specify what would happen upon premature termination of the agreement under regulation 2. Viewing the matter in the round and in the light of the principles set out in Hollins, the agreement had prevented substantial compliance and the master had been correct in his ruling.



Appeal dismissed.



In person for the appellant; no appearance or representation for the second appellant; company representative for the third appellant; J Ayling for the respondent.





Barristers' fees - CDS funding - costs - graduated fees - drafting errors

Lord Chancellor v Nicholas Haggan QC & Ors QBD (Justice Saunders): 22 May 2007
The appellant Lord Chancellor appealed against a decision of a costs judge to allow an appeal of the respondent barrister (H) against the determining officer's assessment of his graduated fees.



A money-laundering trial in which H had been counsel had had a time estimate of 25 to 30 days, but for reasons beyond anybody's control, in particular the ill-health of jurors, it had lasted 61 days.



The graduated fee allowed by the determining officer for H, on her interpretation of schedule 4 of the Criminal Defence Service (Funding) Order 2001, as amended by the Criminal Defence Service (Funding) (Amendment) Order 2004, was £92,913.60. The costs judge, allowing H's appeal, held that on a proper construction of the regulations, the correct fee was £209,024.26. It was agreed by the parties that an error in drafting had led to an inconsistency between paragraphs 7 and 26 of the regulations.



The issue arose as to how, in light of that inconsistency, the regulations should be interpreted or amended. The Lord Chancellor submitted that paragraph 26 should be rewritten with the effect that wherever '25' appeared, '40' was to be substituted, and where 'paragraph 7(1)(b)' appeared in paragraph 26(a), 'paragraph 7(1)(a)' was to be substituted.



Held, the amendments suggested by the Lord Chancellor clearly set out the intention of the draftsman. The original regulations were designed only to cover cases up to ten days and made no provisions for cases that overran. When the scheme was extended to cases up to 25 days, provision was also made for cases which were estimated to last less than 25 days but lasted as long as 30 days. Paragraph 26 was introduced to cover those cases and clearly provided that a graduated fee based on the case lasting 25 days was to be paid with an enhanced refresher for any days beyond 25 up to a maximum of 30.



What was intended by the 2004 amendment order, as made clear in its explanatory notes, was to expand the same scheme to cases lasting 40 days rather than 25. The proposed amendments in the present case were entirely consistent with that intention. Accordingly, paragraph 26 was to be read in accordance with the suggested alterations, R (on the application of Confederation of Passenger Transport UK) v Humber Bridge Board [2003] EWCA Civ 842, [2004] QB 310 considered.



Appeal allowed.



Vikram Sachdeva (instructed by the Treasury Solicitor) for the appellant; Jeremy Morgan QC, Michael Forster (instructed by Payne Marsh Stillwell) for the respondents.



Extradition



Inhuman or degrading treatment or punishment - murder - parole - US - whole life orders

R (on the application of Ralston Wellington) v Secretary of State for the Home Department: DC (Lord Justice Laws, Justice Davis): 18 May 2007
The claimant (W) applied for judicial review of a decision of the secretary of state to order his extradition to the US to face charges of murder and other serious criminal offences.



W had been identified by a witness as being one of a group of armed intruders who had broken into premises in Missouri and had shot the people inside several times, killing two of them and badly injuring the other. A criminal complaint was filed in Missouri charging W with two offences of murder in the first degree and other crimes. W was not arrested until several years later in the UK. The secretary of state ordered W's extradition to the US under the Extradition Act 1989, where, under Missouri law, the penalty for murder in the first degree was death or imprisonment for life with no possibility of parole. An assurance was given that the death penalty would not be sought.



W submitted that if extradited, he would face a real or substantial risk of being sentenced to a whole-life term of imprisonment without the possibility of parole, which would constitute a violation of his right not to be subjected to inhuman or degrading treatment or punishment under article 3 of the European Convention on Human Rights. He contended that the whole-life tariff could only be saved from violation of article 3 if the sentence was imposed by the judgment of an independent court that had been in a position to give due consideration to other sentencing options involving the substantial possibility of parole.



Held, there was no real risk that W's extradition would lead to torture or to such punishment falling short of torture, but attaining a minimum level of severity to give rise to a breach of article 3. Whether or not there had been a violation would depend on the circumstances, and the purpose of the treatment would be important. Where the purpose was to inflict punishment according to law for a crime properly proved in an independent and impartial court, that might weigh heavily in favour of a conclusion that the case did not fall within article 3.



An additional factor might be if it was shown that the prospective punishment, albeit imposed by a blanket legislative rule, was in the particular case by no means out of proportion to the gravity of the alleged offence. An assurance had been given that the death penalty would not be sought, therefore the sentence of a whole-life tariff without possibility of parole did not give rise to a violation of article 3 per se, as such a tariff was appropriate if the crime was sufficiently heinous, Leger v France [2006] considered. The instant hearing was concerned with extradition and it was not for the court to enquire about the sentencing policy in Missouri.



Further, it could not be said that the state of Missouri had been wholly indiscriminate or arbitrary in fixing a whole-life sentence, and such sentences were only available for cases properly categorised as murder in the first degree. Therefore, there was no violation of article 3.



Application refused.



Gareth Patterson (instructed by Russell-Cooke) for the claimant; David Perry QC (instructed by the Treasury Solicitor) for the defendant; Melanie Cumberland (instructed by the CPS) for the interested party USA.



Planning



Compulsory purchase orders - development - judicial review - Olympic Games - planning permission - proportionality

John Sole v (1) Secretary of State for Trade & Industry (2) London Development Agency: QBD (Admin) (Sir Michael Harrison): 30 May 2007
The claimant local resident (C) applied for judicial review of a decision of the first respondent secretary of state to confirm a compulsory purchase order made by the second respondent regional development agency under section 23 of the Acquisition of Land Act 1981.



In 2004, prior to confirmation that London would host the Olympic Games in 2012, joint planning authorities processed the relevant applications and granted planning permission for an Olympic Village. The planning permission was subject to a number of conditions, including a Grampian condition requiring that, if the Olympic bid was successful, the development could not be commenced unless a residential relocation strategy was submitted and approved by the local planning authorities to ensure residents were appropriately relocated. Although the agency submitted a draft strategy, the planning authorities raised concerns about monitoring and control, and the strategy was never approved.



Following the successful bid, the agency made a compulsory purchase order of a housing estate where C lived. An inquiry into the compulsory purchase order was undertaken, by which time the agency had made it clear that it did not rely on the 2004 planning permission. The planning inspector concluded that the order should be confirmed despite the lack of an approved relocation strategy, since the games required extraordinary effort to implement a large-scale development in such a short period of time.



The secretary of state agreed with the inspector's conclusions and adopted them. C sought to quash the order only in relation to the housing estate so that the secretary of state could exercise his discretion under section 13 of the 1981 Act to delay the order until a strategy was approved. C submitted that: the secretary of state failed to take account of and materially misdirected himself in relation to the Grampian condition attached to the 2004 planning permission; the decision to approve the order was a disproportionate interference with his article 8 rights since there was not such an urgent need that justified the secretary of state's refusal to delay the order under section 13.



C argued that, where there was a direct interference with the right to occupy the home, the agency and therefore the secretary of state were obliged to minimise interference with that right.



Held, C's complaint that the inspector's report failed to take account of the Grampian condition was misconceived. When read as a whole, the inspector clearly referred to the condition and was well aware that the absence of an approved relocation strategy had caused disquiet amongst local residents. The inspector was fully entitled to conclude as he did, and noted that throughout the inquiry, the number of residents who attended meetings and objected to the compulsory purchase order was extremely low. Further, an effective relocation process was well underway and there was no need to make retrospective arrangements for those residents that had already moved. There was no need to seek approval for a relocation strategy that was effectively already underway and it was very difficult for C to claim that his needs were not going to be met. There was no basis to make the order conditional on the approval of a freshly-submitted relocation strategy.



The inspector concluded that in light of the totality of evidence, the clear case for the regeneration of the area covered by the order and the widespread public benefit that flowed from the agency's proposals meant that the order was a proportionate interference of the residents' article 8 rights. The secretary of state emphasised the inspector's conclusions, highlighting that the games were justified in the interest of the economic wellbeing of the country.



Having considered the criticisms levelled at the inspector and secretary of state's conclusions, and having considered the report as a whole, the court was not persuaded that there had been an unbalanced or disproportionate approach to the balancing of C's article 8 rights. Applying the minimal interference test, C had himself accepted that there were massive benefits to be gained from the development. The secretary of state had made a proportionate and legitimate decision. C's submission that there was not an urgent need for the order to be implemented was incorrect, since construction of the Olympic Village was due to be carried out in early 2008. The court sympathised with the residents affected by the order and with those who had already lost their homes. The interference with their article 8 rights was clearly a substantial one but the importance of the Olympics and its legacy was overwhelming.



Application refused.



N Lieven QC, R Wald for the applicant: N Lieven QC, R Wald; J Maurici for the first respondent; G Roots QC for the second respondent.