Costs not recoverable on ‘the nod’ - A warning for private prosecutors R (on the application of T M Eye Ltd) v Southampton Crown Court [2021] EWHC 2624 (Admin)

Part three

16 December 2021

Last month, the High Court handed down judgement in R (on the application of T M Eye Ltd) v Southampton Crown Court reinforcing the correct approach to applications for an award from central funds for the costs of a private prosecution. Despite clear ‘Jurisdictional error’ on the part of the Crown Court, the appellant court took the opportunity to warn private prosecutors; applications will not be approved ‘on the nod’.

Background

TM Eye Limited (‘the Claimant’) brought a private prosecution against Ms Peters (‘first interested party’), for unauthorised use of a trade mark in relation to goods, contrary to section 92 of the Trade Marks Act 1994. The Claimant is a firm of private investigators who, as part of their work, are granted powers of attorney by brand owners to investigate and prosecute offenders using their trademark. The Claimants remuneration for this work is derived from the awards under section 17 of the Prosecution of Offences Act 1985 rather than from the brand owners concerned.

Following Ms Peters’ guilty plea and subsequent sentencing, the Claimant applied for two orders for costs. The first was for Ms Peters to pay a ‘means-tested contribution’ to the costs pursuant to section 18 of the 1985 Act. The second was for the remainder of the costs to be awarded from the central fund, pursuant to Section 17. His Honour Judge Rowland declined to make either order.

Whilst explaining the ratio behind his decision, HHJ Rowland declared that he would not make an ‘order for costs against [Ms Peters], on the ground of her impecuniosity’. With regard to making an order under section 17, the judge remarked that, in his interpretation of the statute, he saw nothing to suggest that it was mandatory to make the order. He concluded his sentencing remarks by saying it ‘doesn't seem to me it's appropriate that the taxpayer should bear the burden of financing this prosecution’. This stance was influenced by a mistaken belief that the brand owners were in fact the ‘effective prosecutors’. In his words, granting an order would seem ‘unpalatable’ as the brand owners had a wealth of resources and Ms Peters had ‘very limited means and childcare responsibilities’.

The Claimant’s solicitors subsequently sent a Letter before Claim in relation to a proposed claim for judicial review of the judge’s decision not to make an award under section 17, asserting that ‘the clear default position was that "in the absence of misconduct" an order of costs should be made’. The Claimant’s sought an amendment to the order under the slip rule. This was refused but HHJ Rowland provided further explanation for his previous decision:

[28] “I formed the view counsel expected me to grant the application on the nod. I was not prepared to do so. [Counsel] indicated that she should have dealt with the question of costs in her opening note. That was a proper concession to make”.

[31] "Where an application is made for £23,751.17 (or £28,501.40) to be paid from central funds it is incumbent on the prosecution to advance properly prepared and comprehensive submissions, referring to relevant authorities. Regrettably, that did not happen in this case. I decline to revisit unprepared and incomplete submissions."

On the 24th November 2020, the Claimant issued a claim seeking permission to apply for judicial review challenging the previous judgments. This claim was made on the grounds that the previous decisions were ‘unreasonable, irrational and unlawful’.

 

The claim for judicial review

Judicial review was brought on the following grounds:

  1. The first decision was a jurisdictional error of sufficient gravity to take the case out of the jurisdiction of the Crown Court because:

a) The judge relied on an irrelevant consideration, namely, the assumption as to the wealth of the brand owners.

b) Even if the wealth of the owners was a relevant consideration, the judge had no evidential basis to make an assumption as to their wealth, and, offered no reasoned basis as to why their wealth would justify his decision.

  1. The second decision ‘magnified the jurisdictional errors … previously made’.

 

The Judgment

When considering the judge’s first decision, the High Court emphasised that the roles of both the Claimant and the brand owners were not clearly explained by Counsel resulting in HHJ Rowland’s mistaken belief that the brand owners were the ‘effective prosecutors’. It was this belief that led to the Judge’s concern that the taxpayers would foot the bill for a prosecution being led by three ‘extremely wealthy’ companies. Nevertheless, the High Court asserted that ‘the actual or apparent wealth of the prosecutor’ cannot be a proper reason for refusing to make an order and the Judge fell into jurisdictional error when basing his decision solely on the assumption that the effective prosecutors [had] money’.

Whilst there may have been a jurisdictional error in the first decision, it was rejected that the Judge’s second ruling simply magnified the jurisdictional errors previously made and, on the contrary, should be taken as his more considered decision because it gave separate more valid reasons.

Persuaded that the Judge fell into jurisdictional error in his first decision, the High Court granted the Claimant permission to apply for judicial review, though the claim for judicial review was ultimately refused.

The granting of any remedy in judicial review proceedings is always discretionary. Despite the Judge’s initial error, basing his ruling on the assumed wealth of the prosecutor, the Claimant made its application for costs in an inadequate manner and failed to address the court correctly about the relevant principles. The High Court agreed that the Claimant presented its case ‘on the basis that an application for the usual order was all that was required’ and that ‘it would be granted on the nod’. The High Court took this as an opportunity to confirm this is not the correct way to approach an application for costs from the central funds and to provide private prosecutors with guidance on how to make applications of this kind.

With any application under section 17, the Court must first exercise its discretion in favour of making an order for costs, considering whether making an order is appropriate based on the circumstances of each specific case. If the Court is minded to make an order for costs, a decision is then made whether to ‘limit that award in any way’. On this point, the High Court rejected the submissions of the Claimant that the Court’s ability to limit the award was restricted to cases of ‘misconduct’. The examples within Rule 45.4(5)(b) of The Criminal Procedure Rules 2020 and paragraph 2.6.1 of the Practice Direction are ‘plainly not exhaustive’ and it falls within the Court’s power and its interpretation of the circumstances to decide if it is in fact appropriate to make an order and, if so, in what amount.

Per Mirchandani v Lord Chancellor, the High Court has accepted that private prosecutions are often in the public interest. Consequently, detailed enquiries will often not be necessary to grant an order under section 17. However, it is for the Court to decide whether the process should be ‘long or short’ and not for the prosecutor to assume. This principle continues even where the Claimant applies for an order that the costs be assessed by the Determining Officer.

Whilst it was accepted that rule 45.4 (4)(A) of the 2020 Act only requires a prosecutor making such an application to outline the type of costs and the amount claimed, the High Court contended that the rule does not infer that a Court, provided with minimal information, is unable to inquire further. In addition, the Court could decide to: ‘exercise its power to assess the amount of costs itself pursuant to rule 45.4(6)(b)’. A court cannot be ‘manoeuvred into simply granting the application on the nod’ and the court is entitled to request any information it needs. Therefore, a private prosecutor should be prepared to provide the court with any information it requires. 

Overall, in this case, although the judge had fallen into error in how he reached his conclusion, he was entitled to refuse the application for costs. He had reached an appropriate decision by inappropriate considerations. The judge’s second ruling gave more applicable reasons for his decision. Thus, the High Court felt that had the judge not fallen into this error his final decision would not have been ‘substantially different’. So the High Court considered why did the Judge fall into error? In response, it was stated that the ‘Claimant in our view contributed to [the] error because it made its application for costs in an inadequate manner and failed to address the court correctly about the relevant principles’.

 

This case has shown that the courts will not put up with private prosecutors assuming that applications will be approved ‘on the nod’ and that prosecutors will need to ensure that their submissions are properly prepared. An ‘unsatisfactory presentation of the application’ will not be tolerated.

You can find further blogs on the recovery of costs in private prosecutions by Melinka Berridge here.

FURTHER INFORMATION

For further information on the issues raised in this blog, please contact Melinka Berridge, Partner in our private prosecutions team.

 

ABOUT THE AUTHOR

Melinka Berridge is a Partner at Kingsley Napley. She is a founding member and the Executive Secretary of the Private Prosecutors' Association and she leads the team at Kingsley Napley responsible for the conduct of private prosecutions.

 

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