Costs out of Central Funds
Costs of Privately funded defendants and prosecutors in the Criminal Courts
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.
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.
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.
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.
Documents for Guidance:
Frequently asked questions (Word 21 kb)
Guidance for Practitioners and List of NTT Regions and Areas Covered (Word 85 kb)
Guidance for Legal Advisors in the Magistrates Court and List of NTT Regions and Areas Covered(Word 85 kb)
Flyer for Magistrates Court and distribution to practitioners (Word 72 kb)
Availability of Costs from Central FundsUnder the terms of Part II of the Prosecution of Offences Act 1985, acquitted defendants who have privately funded their legal representation, and private prosecutors, 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.
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.
The Defendants Costs OrderWhere a court has made a defendants costs order, in accordance with s16(6), (7) and (9) 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, the court should assess what amount would be just and reasonable and specify that amount in the order. Where the court exercises this discretion, the circumstances considered should be recorded. See Galandauer v Snaresbrook Crown Court [2007] 2CostsLR 205.
Making a Claim for Costs out of Central fundsWhere the Court has not made a defendants costs order 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. There are clear differences between such claims and claims for work done under a representation order.
Costs out of central funds belong to the defendant in whose favour the order has been made. The claim is therefore made on behalf of the defendant. 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.
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
A claim for costs out of central funds will be determined on the basis set out in regulation 7(3) of the Costs in Criminal Cases Regulations 1986, 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.
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 RuleThe 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 publically funded clients. These requirements are particularly relevant in privately funded cases where Defendants 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 exceded 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 exceded an estimate, solicitors would not necessarily be restricted to recovering the sum in the estimate, but the estimate would be a useful yardstuck 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.
Guideline Hourly Rates issued by the Supreme Court Costs Office In determining 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 Supreme 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.
Guidance on rates January 2008
Previous Guidance on rates 1999 - 2007
Counsels' FeesThe assesment of counsels' fees in central funds cases is dealt with at section II of TONG
In all cases 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.
Interest on Costs out of Central FundsIn 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.
Defendant's Out of Pocket ExpensesPursuant 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 defendants' proper out of pocket expenses. These will be determined under part V of the regulations. There is no appeal process against a determination under that part of the regulations.
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.
Please note that where either a Magistrates Court or Crown Court makes a defendants' costs order in a fixed sum, or a Magistrates Court makes a defendants' costs order which solely relates to the defendant's expenses, the order is paid by the Court and the NTT is not involved.