Costs out of Central Funds
Costs of Privately funded defendants and prosecutors in the Criminal Courts
Availability of Costs from Central Funds
Central Funds in the Magistrates Courts
Defendants' Costs out of Central Funds on or after 31st October 2009
Prosecutors and Appointees, and Defendants before 31st October 2009
Availability of Costs from Central Funds
Making a Claim for Costs out of Central Funds
Application of the Indemnity Rule
Conditional Fee Agreements and Success Fee
Interest on Costs out of Central Funds
Under the terms of Part II of the Prosecution of Offences Act 1985, acquitted defendants who have privately funded their legal representation, private prosecutors, and appointees may obtain from the Court an order to obtain their costs out of central funds. Such claims for costs are determined by the NTT under the terms of Part III of the Costs in Criminal Cases (General) Regulations 1986.
The procedure to be adopted when seeking an order for costs from the court on or after 20th October 2009 is set out in Rule 76.2 of the Criminal Procedure Rules, and the procedure to be adopted specifically in seeking an order for costs out of central funds is set out in Rule 76.4. The practice and procedure relevant to the process of assesment of the amount of costs is set out in Rule 76.11
Court Business item B2558 of June 1993 referred to the judgement of the Queen's Bench Division in Regina v Liverpool Crown Court, ex parte Lord Chancellor (TLR 22 April 1993) which held that the consequences of not ammending a legal aid order to reflect the actual legal representation could not be rectified by awarding costs from central funds.
Orders for costs to be paid out of central funds may be made in other circumstances, but Court Business item B2574 of July 1993 referred to the judgement of the House of Lords in Steel Ford and Newton (and others) v Crown Prosecution Service and Lord Chancellor's Department (TLR 28 May 1993) which confirmed that there is no power to make a costs order from central funds in the absence of specific statutory provision. As a consequence in August 1992 courts were provided with a chart that listed the type of proceedings and relevant statutory provisions.
That chart was consolidated with additions and now forms Schedule 2 to the Practice Direction on Costs in Criminal Proceedings handed down on 18th May 2004.
Where a witness called by the accused is examined through an intermediary or an accused is examined through an imtermediary under sections 29 or 33BA of the Youth Justice and Criminal Evidence Act 1999, the expenses properly incurred thereby by the intermediary will be allowed out of central funds in accordance with Part V of the Costs in Criminal Cases (General) Regulations 1986 unless the court directs that the expenses are not to be allowed out of central funds. The appointment and funding of an intermediary is currently dealt with by the Office for Criminal Justice Reform and is dealt with in detail in the OCJR Intermediary Procedural Guidance Manual. A person acting as an intermediary will normally be a "Registered Intermediary". Such a person will have been trained and assessesed and their name will appear on the National Register of Intermediaries maintained by the OCJR. Such registered intermediaries will comply with the Code of Practice and Ethics maintained by the Intermediary Registration Board. Unregistered intermediaries may however be used. The proper expenses of an intermediary will be allowed by the court in accordance with directions given to them by the MoJ and are not paid by the NTT.
The Costs Order
Where a court has made a defendants costs order, in accordance with s16(6), (7) and (9) , or an order for the costs of a private prosecutor in accordance with s17(1) of the Prosecution of Offences Act 1985, the amount to be paid out of central funds will be either:
(a) where (i) the court considers it appropriate, and (ii) the person in whose favour the order is made agrees the amount, specified by the court in the order, and paid by the court
or
(b) in any other case, determined in accordance with the provisions of the Costs in Criminal Cases (General) Regulations 1986 by the National Taxing Team.
However, where the court making the order is of the opinion that there are circumstances which make it inappropriate that the full amount of costs should be recovered by the defendant or prosecutor, the court should assess what amount would be just and reasonable and specify that amount in the order. This may expressed as a formula such as a percentage of the total costs. Where the court exercises this discretion, the circumstances considered should be recorded. See Galandauer v Snaresbrook Crown Court [2007] 2 Costs LR 205.
Where the defendant is convicted on some charges and acquitted on others, a defendants costs order may still be made. The court should indicate the proportion of costs to be recovered in the order. In the case of R v Taylor [2000] 1 CostsLR 32, where the defendant was acquitted on one of two counts on the indictment, Costs Judge Pollard held that a court exercising the power in s16(7) can express in terms whereby the defendant should receive only a fixed percentage of the costs as taxed.
The costs of court appointees i.e. (a) either a person appointed by the Crown Court under section 4A of the Criminal Procedure (Insanity) Act 1964 to put the case for the defence or (b) a legal representative appointed by the court under section 38(4) of the Youth Justice and Criminal Evidence Act 1999 to cross-examine a witness in the interests of the accused are determined by the NTT under the terms of Part IIIA of the Costs in Criminal Cases (General) Regulations 1986. Where an appointment is made no specific order is made by the court, but the appointee should obtain a written document from the court setting out the nature and extent of the appointment. This document will be required by the NTT to enable the claim for costs to be determined.
Making a Claim for Costs out of Central funds
Where the Court has made a costs order but not in a fixed sum, it will be necessary for a claim to be lodged for determination. The claim should be lodged within three months of the order being made. Costs out of central funds belong to the defendant or prosecutor in whose favour the order has been made, or the appointee. The claim is therefore made on behalf of the applicant.
It was confirmed in Morris v The Lord Chancellor that the cost of drafting and preparing a claim for costs out of central funds is not itself a recoverable cost.
In the case of an acquitted defendant, the type of claim to be lodged will depend on whether the case commenced either before 31st October 2009 or on or after 31st October 2009. Reference should therefore be made to the sections below for information applicable to these separate situations. Where a case commences in the Crown Court on or after 31st October 2009 but has linked proceedings in the Magistrates Court which commenced prior to 31st October 2009, claims for costs in the Magistrates Court should be dealt with on the basis applicable to central funds before 31st October 2009.
Claims for costs by a private prosecutor or an appointee will continue to be determined on the standard basis.
Any application to allow a claim for costs out of time, or for an extension of time to submit, should be made to the appropriate Regional Taxing Manager. The time limits set out in the regulations will usually be strictly applied.
Application of the Indemnity Rule
The case of John Mallory Garbutt v Andrew Edwards ([2005] EWCA Civ 1206) confirms that the indemnity principle remains in full force and effect and its application to claims for costs out of central funds is confirmed by the decision of the Costs Judge in the case of R v Cowie ([2006] 2 CostsLR 375).
In order to check compliance with the indemnity rule the determining officer will usually want to examine the original letters establishing the retainer and setting out the charge rates and overall estimate of costs, and also to examine any interim or final bills rendered to the client, whether or not these have actually been paid. In the case of R v Clerk to Liverpool Magistrates Court ex parte Larkin [Times 12/1/2001] Rose LJ held that the ammendment to reg 6(2) of Costs in Criminal Cases (General) Regulations was not to be construed to mean that a defendant must actually have paid costs before reimbursement could be made out of central funds. However, if any costs had been paid, receipts should be produced.
Rule 2.03 of the Solicitors Code of Conduct which came into effect on 1st July 2007, deals with costs information which must be given both to private clients and publicly funded clients. These requirements are particularly relevant in privately funded cases where costs orders are ultimately given and a claim for costs out of central funds is determined by the NTT. The determining officer in such circumstances will expect to see on solicitors file a client care letter at the commencement of proceedings setting out the fee earners acting and the relevant charging rates, and further such letters where fee earners or cost rates or the estimate have changed.
As to the significance of estimates of costs liability given to the client by solicitors, see Wong v Vizards [1997]2CostsLR 46. In this case it was held by Toulson J. that hourly charge out rates should not normally be increased without the client being first informed, and estimates of gross total costs should not be greatly exceeded without good reason. In the case of MasterCigars Direct Ltd v Withers LLP [2007]EWHC 2733 (Ch) Morgan J. held that where costs subsequently claimed exceeded an estimate, solicitors would not necessarily be restricted to recovering the sum in the estimate, but the estimate would be a useful yardstick by which the reasonableness of the final bill may be judged. In Reynolds v Stone Rowe Brewer [2008] EWHC 497 Tugendhat J. upheld a Costs Judge who had bound solicitors to an original estimate with the 15% margin available under established case law.
Conditional Fee Agreements and success fees
Success fees cannot apply to criminal cases by reason of the fact that any retainer which provides for a success fee is a "Conditional Fee Agreement". CFAs are governed by s58 and s58A of the Courts and Legal Services Act 1990, and the Conditional Fee Agreements Regulations 2000.
s58A provides:
Conditional fee agreements: supplementary
(1) The proceedings which cannot be the subject of an enforceable conditional fee agreement are-
(a) criminal proceedings, apart from proceedings under section 82 of the Environmental Protection Act 1990; and
(b) family proceedings.
It follows that save with exception of EPA proceedings, any CFA in a criminal case is unenforceable, and the client is not liable to pay any such success fee to his solicitor. By reason of the indemnity rule such costs cannot therefore be recovered from central funds.
Interest on Costs out of Central Funds
In the case of Westminster City Council v Wingrove [1991] 4 All ER 691] it was decided that there is no basis in statute regulation or order for the payment of interest on costs awarded from central funds in a criminal cause or matter. Sections 17 and 18 of the Judgements Act 1838 do not apply to criminal proceedings.
Pursuant to regulation 23 of the Costs in Criminal Cases (General) Regulations 1986:
"A person in whose favour an order is made under section 16, 17, or 19(4) of the Act may be allowed the same subsistence allowance and travelling expenses as if he attended as a witness other than a professional or expert witness."
A loss allowance (regulation 18(1)(a)) including loss of earnings, is excluded by regulation 23 and these are not costs "incurred in carrying on the proceedings" within the terms of regulation 7.
A separate schedule should therefore be lodged of any applicant's proper out of pocket expenses. These expenses are payable under part V of the regulations, and should be lodged with the court and not the NTT unless unusually complex, in which case the determining officer allocated to the substantive determination may exercise discretion to deal with the out of pocket expenses. If the expenses are dealt with by the NTT, confirmation will be required that no claim for the defendant's expenses of any kind has been lodged with the court by conducting solicitors or the defendant personally.
As such expenses are dealt with under part V of the regulations, there is no formal appeal process against a determination.
The rates of car mileage allowed (regulation 24(5)) will be those specified in the current Guide to Allowances (regulation 17) i.e a standard rate of 45p per mile and a public transport rate of 25p per mile.
The standard rate of mileage is only paid where the use of a private motor vehicle was necessary (for example because no public transport was available), or where a considerable saving of time is made, or where the use of a private motor vehicle was otherwise reasonable (for example, in the case of elderly or disabled persons, or carrying exhibits). In all other cases the public transport rate of mileage will be applied. Car parking fees actually and reasonably incurred will be allowed, but only where standard rate of mileage has been allowed.
Where either a Magistrates Court or Crown Court makes a costs order in a fixed sum, or a Magistrates Court makes a costs order which solely relates to the defendant's expenses, the costs and expenses are paid in any event by the Court and the NTT is not involved.
Central Funds in the Magistrates Court from 13th October 2008
As a consequence of the coming in to force of the The Costs in Criminal Cases (General) (Amendment) Regulations 2008, from Monday 13 October 2008, the NTT will be responsible for the determination of claims for costs from Central Funds in the Magistrates’ Courts, where a specified amount of costs has not been fixed by the Court and an order has been made for taxation.
Where the Magistrates Court has fixed the amount of costs to be awarded from central funds, those costs will continue to be dealt with and paid by the Court.
Where the applicant is only claiming expenses i.e. out of pocket expenses, travelling expenses and subsistence allowance, those costs will also continue to be dealt with and paid by the Court.
From the commencement date practitioners must send all new qualifying claims directly to the relevant office of the NTT (regardless of the date of the costs order). The relevant office will be determined by which NTT office covers those Crown Courts to which the Magistrates Court usually sends or commits criminal cases.
If you have any queries as to which office you should send your claim, please contact any NTT regional office for advice or contact the NTT Customer Service and Communications Manager on 07500 814088.
Submitting a Magistrates Court central funds claim
Solicitor’s files must be sent with every claim submitted to the NTT.
Practitioners must endorse either the Libra reference number or the unique Magistrates’ Court reference number on the claim.
From 1st April 2009 where a costs order has been made from Central Funds, the Court’s Libra system will issue a defendant’s costs order certificate. The Court must send this certificate to the solicitor for submission with the claim for costs to the NTT. This will ensure that claims are dealt with as quickly as possible. Any claims relating to orders made after that date, without a costs order certificate attached, will be returned by the NTT.
The NTT has produced a claim form which may be used when submitting Magistrates' Court Central Funds claims. This form includes all the information which the NTT require in order to process the claim quickly. The cover sheet should also be completed to ensure that all the relevant documents are included and that confirmation is given to the NTT that no other claim has been made in respect of that case and that no Representation Order has been in force in respect of the applicant.
Where a claim is made for costs incurred prior to the grant of a representation order, the NTT will expect to see an explanation as to why those costs were not covered by the various schemes operated by the Legal Services Commission, including advice and assistance and early cover.
Please see the section below as to the requirement of a client care letter to satisfy the requirements of the indemnity rule.
Claim Form (Word 51 kb)
Cover Sheet (Word 189 kb)
Documents for Guidance:
Frequently asked questions (Word 21 kb)
Guidance for Practitioners (Word 35 kb)
Guidance for Legal Advisors in the Magistrates Court (Word 85 kb)
List of Magistrates Courts covered by the NTT Regions after 15th March 2010 (Excel 35 kb)
Flyer for Magistrates Court and distribution to practitioners (Word 72 kb)
Poster for Magistrates Court (Word 116 kb)
If you have a general query about the NTT’s application of these regulations please contact Phil Sulley on 0121 681 3260 or Roger Pendleton on 01302 363988.
There is no provision in the regulations for redetermination of costs out of central funds in the Magistrates Court. The redeterminations page indicates how the NTT will deal with any request for a review of the amounts allowed in these circumstances.
For cases commencing in the Magistrates Court on or after 31st October 2009 see the section below as to the applicable rates and scales fixed by the Lord Chancellor.
Defendants' costs out of Central Funds on or After 31st October 2009
As a consequence of the coming into effect on 31st October 2009 of the Costs in Criminal Cases (General) (Amendment) Regulations 2009 the whole basis on which claims for defendants costs out of central funds are determined and paid has changed. These provisions do not apply to the costs of private prosecutors or appointees (orders under s17 or s19 Prosecution of Offences Act 1985).
For all cases which commence either in the Magistrates Court or in the Crown Court after the operative date, defendants costs from central funds will be remunerated on a basis similar to that used to determine remuneration within the Criminal Defence Service for defendants with a representation order.
The detailed scheme for determining remuneration is set out in the Rates and Scales instrument issued by the Lord Chancellor under authority of regulation 7(4) of the Costs in Criminal Cases (General) Regulations 1986 as amended.
The Lord Chancellor has also issued under regulation 5(3) Directions and Guidance to determining officers as to how they are to exercise their discretion in determining claims for costs out of central funds under the new system.
The Lord Chancellor has also issued Directions and Guidance as to how Crown Court VHCC-class claims are to be categorised and dealt with.
In the Magistrates Court the rates and scales to be applied by determining officers are based on those in the Criminal Defence Service Unified Criminal Contract.
The existing claim form and cover sheet for claims for costs out of central funds in the Magistrates Court may be used to make a claim in this class of work.
In the Crown Court cases are categorised either (1) as VHCC class, in which case remuneration will be determined on a basis similar to that in Criminal Defence Service Very High Costs Case contracts, or (2) as non-VHCC class, in which case remuneration will be determined on a basis similar to that in Criminal Defence Service advocate and litigator graduated fees.
Applicants for costs should note that as a consequence of these changes specific information will be required by the NTT with every claim to enable the claim to be allocated to the correct class, or within the VHCC class to the correct category. The information required is specified in the Guidance. Where this information is not supplied, claims will be returned.
Non-VHCC class claims
The following calculators are provided to enable applicants to ascertain the remuneration payable in the Crown Court non-VHCC class:
Advocates fees - pleas and cracked trials in first third
Advocates fees - cracked trials in final two thirds
A claim for this class of costs must be made on the following forms which contains all the information required by the NTT.
Cover sheet and litigator's claim - must be completed by the litigator for all non-VHCC class claims
Advocates claim - a separate claim form must be completed for each advocate in respect of whom costs are claimed
VHCC class claims
The Guidance document sets out the information required for this class of claim. Please note that where full information is not supplied in accordance with paragraph 8 of the Guidance, claims will be returned.
No special form has been provided as this class of claim may be drafted in the form of a standard basis claim from central funds, but utilising the rates and scales now set out by the Lord Chancellor. The Guidance on Crown Court VHCC-class claims should be consulted as to how work should be claimed.
Prosecutors and Appointees, and Defendants Costs before 31st October 2009
Guideline Hourly rates issued by the Senior Courts Costs Office
The costs of private prosecutors, appointees, and defendants where the case commenced prior to 31st October 2009, will continue to be determined on the standard basis.
There are no set forms for the making of such a claim, although these should follow in broad terms the precedents annexed to the current practice direction for civil costs, although without importing the specific detailed requirements of that direction (see John Joseph Morris v The Lord Chancellor).
There are no fixed rates in central funds and although the the use of the "A+B" calculation remains an appropriate method, determining officers will now be guided by the composite rates issued by the Supreme Court Funds Office (which cover four grades of fee earner and include a 50% mark up). The use of such composite rates was approved in R. (Hale) v North Sefton Justices (2002) EWHC 257 (Admin). Where the basis of the retainer between solicitors and the client is that a uniform composite rate is charged for all work, the NTT will determine the claim on that basis allowing a uniform rate throughout the claim with no reduction for travel and waiting.
These claims will be determined on the basis set out in regulation 7(3) of the Costs in Criminal Cases Regulations 1986 prior to the 2009 amendment, which is identical with what was the "standard basis" of taxation in the previous RSC order 62. The abolition of RSC order 62 and its replacement by the Civil Procedure Rules does not affect the basis on which claims for costs out of central funds in criminal matters are determined.
Guideline Hourly Rates issued by the Senior Court Costs Office
In determining these claims for costs out of central funds, determining officers will have regard to the hourly rates set out in the current and previous guidance from the Senior Court Costs Office for various categories of fee earner.
These rates usually apply to the location of solicitors' office and not to where the matter is tried. However, where a solicitor not local to the court of trial has been instructed the determining officer may apply a test of reasonableness as to which rate may be considered as relevant. Where the rate claimed differs from the guidance rate indicated in the SCCO table, further explanation should be provided in the narrative of the claim.
SCCO Guidance on rates January 2009
SCCO Guidance on rates January 2008
Previous SCCO Guidance on rates 1999 - 2007
The assesment of counsels' fees in these cases will be dealt with in accordance with section II of TONG
Where counsels' fees are claimed the determining officer will expect to see counsels' fee notes. The Bar Code of Conduct at paragraph 701(f) now requires barristers in independent practice to ensure that adequate records supporting the fees charged or claimed in a case are kept at least until the first of the following: payment of fees, conclusion of any determination process, or expiry of any time for appeal.
The basic principles for the assesment of counsels' fee were set out by Pennycuick J. in the case of Simpson's Motor Sales (London) Ltd v Hendon Borough Council [1965] 1WLR 112: "One must envisage a hypothetical counsel capable of conducting the particular case effectively but unable or unwilling to insist on the particularly high fee sometimes demanded by counsel of pre-eminent reputation. Then one must estimate what this hypothetical character would be content to take on the brief..."
A solicitor may have to justify the brief fee if it is enhanced to reflect expenses incurred in travel to a distant court, especially if a local Bar was available.