R v John Doak
[2023] EWHC 271 (SCCO)
R (on the application of) Allseas Group SA v Paul Sultana
31 October 2023
[2023] EWHC 2731 (SCCO)
Senior Courts Costs Office
A company successfully sued someone for fraud. The government wanted to pay less for the company's legal fees. The judge said the fees were fair because the case was really complicated and hard to win, even though the company didn't shop around for the cheapest lawyers.
Key Facts
- •Allseas Group SA (Appellant) privately prosecuted Paul Sultana for fraud.
- •Sultana was convicted after two trials.
- •Appellant appealed the Determining Officer's assessment of their costs from central funds under section 17 of the Prosecution of Offences Act 1985.
- •The appeal concerned hourly rates for solicitors and counsel.
- •The Appellant's solicitors were Mishcon de Reya LLP, a central London firm.
- •The Appellant's leading counsel was Jonathan Laidlaw KC, and junior counsel was Ben Smitten.
- •The case involved a complex, multi-million-euro fraud and lengthy trials.
Legal Principles
Costs awarded under section 17 of the 1985 Act must be reasonably sufficient to compensate the prosecutor for properly incurred expenses.
Prosecution of Offences Act 1985, section 17(1)
The court can limit recoverable costs if circumstances make full recovery inappropriate.
Prosecution of Offences Act 1985, section 17(2A)
Assessment of costs is governed by the Costs in Criminal Cases (General) Regulations 1986.
Costs in Criminal Cases (General) Regulations 1986
When assessing costs, the appropriate authority (Determining Officer) considers whether work was actually and reasonably done and disbursements actually and reasonably incurred, taking into account all relevant circumstances.
Costs in Criminal Cases (General) Regulations 1986, Regulation 7
Any doubts about whether costs were reasonably incurred or reasonable in amount are resolved against the applicant.
Costs in Criminal Cases (General) Regulations 1986, Regulation 7(3)
In determining whether it was reasonable to instruct particular solicitors or counsel, the court considers what steps were taken to ensure that the terms of engagement were reasonable, including whether the market was tested through tenders or quotations.
R (Virgin Media Ltd) v Zinga [2014] EWCA Civ 1823
The assessment of counsel's fees uses the 'hypothetical counsel' test: what fee would a capable counsel take?
Simpsons Motor Sales (London) v Hendon Borough Council [1965] 1 WLR 112
A litigant making a 'luxury choice' of solicitors in an expensive location when less expensive solicitors would have been reasonable may recover costs only at the level of the reasonable choice.
Wraith v Sheffield Forgemasters Ltd [1996] 1 WLR 617
Outcomes
The appeal was partially successful.
The Costs Judge adjusted the hourly rates for solicitors and counsel upwards, taking into account the complexity and difficulty of the case, but rejected the Lord Chancellor's arguments for applying lower rates based on a lack of tendering.
Hourly rates for Mishcon de Reya solicitors were increased.
The Costs Judge found that instructing Mishcon was reasonable, and the lack of a tendering process did not justify applying the lowest geographical rates. The judge adjusted the 2010 Guideline Hourly Rates (GHRs) for inflation and complexity.
Counsel's fees were adjusted upwards.
While acknowledging some shortcomings in the tendering process for counsel, the Costs Judge rejected using CPS rates as a comparator and instead relied on guidance from Evans v Serious Fraud Office to determine reasonable fees. The Judge made adjustments to the amounts awarded for the brief fees and refreshers.
Mishcon's internal photocopying costs were disallowed.
The Costs Judge considered such costs to be an overhead and not separately recoverable.