7.1a Costs incurred as a result of unnecessary or improper act or omission

The Magistrates’ Court, the Crown Court and the Court of Appeal (Criminal Division) all have the power to order payment of any costs incurred as a result of any unnecessary or improper act or omission by or on behalf of any party to the proceedings as distinct from acts, omissions, etc, of his or her legal representatives under section 19 of the 1985 Act and Regulation 3 of the General Regulations.

7.2 Before making any order the court must hear the parties and may make an order for payment in full or in part. Before doing so, however, the court must take account of any other order as to costs and must specify the amount to be paid under this order. Such an order may extend to cover LSC costs incurred on behalf of any party under section 21(4A)(b) of the 1985 Act. It must be emphasised that an order under this section can only be made where the defendant or the prosecutor is responsible for the matters complained of. Different considerations apply where a legal representative is alleged to be responsible (see below: Section VIII and Section IX).

7.3 In a Magistrates’ Court costs ordered under this section may not (in the case of a person under the age of 17 who has been convicted of an offence) exceed the amount of any fine imposed upon him.

71.b Costs in restraint, confiscation or receivership proceedings

7.4 The order for costs

Section VIIB of the Practice Direction http://www.courtservice.gov.uk/cms/media/costs_pd_180504.pdf only applies where the Crown Court is deciding whether to make an order for costs under Rule 12 of the Crown Court Rules 1982 in relation to restraint, confiscation or receivership proceedings brought under the Crown Court (Confiscation, Restraint and Receivership) Rules 2003 [http://www.legislation.hmso.gov.uk/si/si2003/20030421.htm]. Although the court has a discretion as to whether costs should be payable by one party to another; the amount of those costs; and, when they are to be paid; the general rule is that if the court decides to make an order about costs, the unsuccessful party will normally be ordered to pay the costs of the successful party. The court retains its discretion to make a different order.

7.5 Under Rule 25 of the 2003 Rules http://www.legislation.hmso.gov.uk/si/si2003/20030421.htm, the Crown Court may make orders in respect of security to be given by a receiver to cover his liability for his acts and omissions. The Crown Court also has the power to determine the remuneration of the receiver under Rule 26 [http://www.legislation.hmso.gov.uk/si/si2003/20030421.htm].

7.6 Before deciding whether to make any order about costs the court is required to take account of all the circumstances, including the conduct of the parties and whether a party has succeeded on part of an application even though that party may not have been completely successful.

7.7 The 2003 Rules [http://www.legislation.hmso.gov.uk/si/si2003/20030421.htm] give the court a wide discretion as to the types of order that it may make. These include orders that one party must pay:

(a) a proportion of another party’s costs;

(b) a stated amount in respect of another party’s costs;

(c) costs from or until a certain date only;

(d) costs incurred before proceedings have begun;

(e) costs relating to particular steps taken in the proceedings;

(f) costs relating only to a distinct part of the proceedings; and

(g) interest on costs from or until a certain date including a date before the making of an order.

7.8 The 2003 Rules [http://www.legislation.hmso.gov.uk/si/si2003/20030421.htm] contain provisions very similar to those presently to be found in respect of civil cases in CPR Part 44 [http://csi01/latestcpr/contents/parts/part44.htm]

7.9 Courts are encouraged to award a proportion, that is to say a percentage of costs, or costs between certain dates, rather than making an order relating only to a distinct part or issue in the proceedings. This is because the latter order causes considerable problems when it comes to assessing the costs. In addition the court may order a party, which has to pay costs, to make a payment on account in advance of assessment of those costs, but, where it does that, the court should state the amount to be paid and the date, on or before which, such payment has to be effected.

7.10 Assessment of costs

Where a Crown Court makes an order for costs in restraint, confiscation or receivership proceedings it can either do so by way of summary assessment at the hearing before it, or it may order assessment of those costs under Rule 14 of the Crown Court Rules 1982. If the order is silent as to how the assessment is to be conducted then it will be decided by assessment under Rule 14 of the 1982 Rules. The court, when directing costs to be assessed under Rule 14 of the 1982 Rules, ought always to consider whether to order the paying party to pay a sum of money on account of those costs.

7.11 In carrying out the assessment the court or taxing authority is required to allow only those costs that are proportionate to the matters in issue and to resolve any doubts that it may have as to whether or not the costs were reasonably incurred or were reasonable and proportionate in amount in favour of the paying party.

7.12 The court or taxing authority carrying out the assessment should consider all the circumstances, in deciding whether costs were proportionately or reasonably incurred or proportionate and reasonable in amount, and in doing so effect must be given to any orders for costs that have already been made. The court or taxing authority should take into account particularly the following factors:

(a) the conduct of all the parties, which includes conduct before as well as during the proceedings;

(b) the amount or value of any property involved;

(c) the importance of the case to all the parties;

(d) the particular complexity of the matter or the difficulty or novelty of the questions raised therein;

(e) the skill, effort, specialised knowledge and responsibility involved;

(f) the time spent on the case; and

(g) the place where and the circumstances in which the work or any part of it was carried out.

7.13 In applying the test of proportionality the court or taxing authority must always bear in mind the objective of dealing with cases justly, which means that, as far as practicable, those costs should be proportionate to:

(a) the amount of money involved;

(b) the importance of the case;

(c) the complexity of the issues; and

(d) the financial position of the each party.

However, the relationship between the total costs incurred and the financial value of the claim may not of itself be a reliable guide to proportionality.

7.14 In all proceedings a certain level of costs will inevitably be incurred which are necessary for the successful conduct of that case. For example in civil cases: since solicitors are not required to conduct litigation at rates that are uneconomic, costs in a modest claim may form a higher proportion than in a large claim and can even equal or possibly exceed the amount in issue.

7.15 The time spent in court will not necessarily be an accurate guide to the prior preparation time properly put in by the solicitors.

7.16 The 2003 Rules [http://www.legislation.hmso.gov.uk/si/si2003/20030421.htm]do not apply to the assessment of costs to the extent that section 11 of the Access to Justice Act 1999 [http://www.hmso.gov.uk/acts/acts1999/19990022.htm] (Costs in Funded Cases) applies. Reference should be made to the Statutory Instruments made under that Act which lay down different provisions and to the Guidance Notes issued by the Senior Costs Judge [http://www.courtservice.gov.uk/using_courts/guides_notices/notices/scco/guide/section25.htm].

7.17 Remuneration of a receiver

A receiver may only charge for services if the Crown Court so directs and also specifies the basis upon which that remuneration is to be made. The Crown Court (unless it otherwise orders) is required to award such sum as is reasonable and proportionate in all the circumstances. In arriving at a figure for remuneration of a receiver the court should take into account the following factors:

(a) the time properly given by the receiver and his staff to the receivership;

(b) the complexity of the receivership;

(c) any responsibility of an exceptional kind or degree that falls on the receiver in consequence of the receivership;

(d) the effectiveness with which the receiver appears to be carrying out or to have carried out his duties; and

(e) the value and nature of the subject matter of the receivership;

7.18 If the Crown Court decides not to determine the receiver’s remuneration itself it may refer the issue to the taxing authority of the Crown Court, in which case Rules 15 to 18 of the Crown Court Rules 1982 (determination and review by the taxing authority, further review by a Taxing Master/Costs Judge and final appeal to a High Court Judge) have effect as if the taxing authority was ascertaining those costs.

7.19 Procedure on appeal to the Court of Appeal

The costs of and incidental to all proceedings on an appeal to the Court of Appeal Criminal Division against orders made in restraint proceedings, or appeal against or relating to the making of receivership orders are in the discretion of the court. The court has full power to determine by whom and to what extent the costs are to be paid (Proceeds of Crime Act 2002 section 89(4) http://www.legislation.hmso.gov.uk/acts/acts2002/20020029.htm). The Court of Appeal also has the power to make wasted costs orders (see Part VIII below).

7.19c. Award of costs against third parties

7.20 The court may make a ‘third party costs order’ if there has been serious misconduct (whether or not constituting a contempt of court) by a third party and the court considers it appropriate having regard to that misconduct to make such an order. The power to make a third party costs order is vested in the Magistrates Court, the Crown Court and the Court of Appeal (Section 19B Prosecution of Offences Act 1985).

7.21 The Lord Chancellor has the power to make Regulations specifying the types of conduct in respect of which a third party costs order may not be made and in respect of other related matters. At the time of writing this Guide no Regulations have been issued. The Regulations will provide a procedure for appeal from the Magistrates Court to the Crown Court and from the Crown Court to the Court of Appeal.