HC Deb 25 July 1990 vol 177 cc533-43

' . The following section shall be inserted after section 19 of the Prosecution of Offences Act 1985—

"Costs against legal representatives etc.

19A.—(1) In any criminal proceedings—

  1. (a) the Court of Appeal;
  2. (b) the Crown Court; or
  3. (c) a magistrates' court,
may disallow, or (as the case may be) order the legal or other representative concerned to meet, the whole of any wasted costs or such part of them as may be determined in accordance with regulations.

(2) Regulations shall provide that a legal or other representative against whom action is taken by a magistrates' court under subsection (1) may appeal to the Crown Court.

(3) In this section—

  1. (a) as a result of any improper, unreasonable or negligent act or omission on the part of any representative or any employee of a representative; or
  2. (b) which, in the light of any such act or omission occurring after they were incurred, the court considers it is unreasonable to expect that party to pay." '.—[The Attorney-General]

Brought up, and read the First time.

The Attorney-General

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker

With this it will be convenient to take the following: As amendments to the proposed new clause, amendment (e), in line 13, at end insert 'and that a legal or other representative against whom action is taken by the Crown Court under Subsection (1) may appeal to the Court of Appeal.'.

Amendment (g), in line 13, at end insert— '(2A) Where an appeal under subsection (2) is successful in whole or in part the Court hearing the appeal may make an order for payment of the legal or other representative's costs of the original hearing and the appeal to be made either out of central funds or, where the order under subsection (1) was made at the instance of any party to the proceedings, by that party".

Amendment (b), in line 22, after 'representative', insert 'in breach of that representative's duty to the court or to his client'.

Amendment (c), in line 22, after 'representative', insert 'or employee of the Crown Prosecution Service'.

Amendment (d), in line 25, at end insert— '(4) Regulations made by virtue of this section—

The Solicitor-General

I beg to move, That the clause be read a Second time.

New clause 18 amends section 1c(3) of the Arbitration Act 1950 to provide for the appointment of an arbitrator in a reference, which is to be to three arbitrators without the need for an application to the court to make such an appointment in circumstances where one party fails to make the appointment expected of him.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

  1. (a) shall require a court which proposes to make a costs order against a legal or other representative to allow him a reasonable opportunity to appear before it and show cause why it should not do so; and
  2. (b) shall provide that no such order shall be made after the end of the period of six months beginning with the date on which the proceedings are disposed of by the court.'.

Government amendment No. 13.

Government amendment No. 14, in clause 4, page 7, line 22, at end insert— '(5A) In any proceedings mentioned in subsection (1), the court may disallow, or (as the case may be) order the legal or other representative concerned to meet, the whole of any wasted costs or such part of them as may be determined in accordance with rules of court. (5B) In subsection (5A), "wasted costs" means any costs incurred by a party—

  1. (a) as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative or any employee of such a representative; or
  2. (b) which, in the light of any such act or omission occurring after they were incurred, the court considers it is unreasonable to expect that party to pay.'.

As amendments to the proposed amendment, amendment (a), in line 8, after 'representative', insert 'in breach of that representative's duty to the court or to his client'.

Amendment (b), in line 10, at end insert—

'(5C) Rules of court—

  1. (a) shall provide that where the court proposes to make a costs order against a legal or other representative it shall allow him a reasonable opportunity to appear before it and show cause why it should not do so; and
  2. (b) shall provide that no such order shall be made after the end of the period of six months beginning with the date on which the proceedings are disposed of by the court.

(5D) Where an appeal against an order under subsection

'(1) In any civil proceedings, a magistrates' court may disallow or (as the case may be) order the legal or other representative concerned to meet the whole of any wasted costs or such part of them as may be determined in accordance with rules.

(1A) In subsection (1), "wasted costs" means any costs incurred by a party—

  1. (a) as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative or any employee of such a representative; or
  2. (b) which, in the light of any such act or omission occurring after they were incurred, the court considers it is unreasonable to expect that party to pay.'.

Amendment (a) to the proposed amendment, in line 8, after 'representative', insert 'in breach of that representative's duty to the court or to his client'.

Government amendments Nos. 38 to 41.

Government amendment No. 42, in clause 93, page 74, line 31, at end insert 'and (d) shall provide that a legal or other representative against whom action is taken under the rules may appeal to the Crown Court".'.

Amendment (a) to the proposed amendment, at end insert, 'and where such an appeal is successful in whole or in part the Crown Court may make an order for payment of the legal or other representative's costs of the original hearing and the appeal to be made either out of central funds or where the order under subsection (1) was made at the instance of any party to the proceedings, by that party'.

Government amendment No. 183.

7.15 pm
The Attorney-General

The package of amendments of which new clause 19 forms part was foreshadowed in another place and in Committee. It establishes in primary legislation an identical power and identical test for its exercise in each court whereby legal and other representatives may be ordered to compensate others for costs that result from the representatives' own fault. In doing so, the amendments clear up a confusion in the law about the applicable test in such cases in the Supreme Court. After debates in another place, and with the agreement of the Lord Chief Justice and the Master of the Rolls, the Government are in no doubt that the applicable test should be the one of simple negligence and that the test needs to be clearly established in primary legislation. In plain terms, justice surely demands that all the courts have power to shift the loss from an innocent party on to the representative whose negligence has caused it.

I hope that amendment No. 14 will be taken with the new clause or, if not, immediately afterwards. I trust that it is relevant for me to speak to it now.

Amendment No. 14 establishes the simple negligence test for the High Court in the Court of Appeal civil

(5A) is successful in whole or in part the court may make an order for payment of the legal or other representative's costs of the original hearing and the appeal to be made either out of central funds or where the order under subsection (5A) was made at the instance of any party to the proceedings, by that party.'.

Government amendments Nos. 15 and 16.

Government amendments No. 37, in clause 93, page 73, line 35, leave out subsection (1) and insert—

division as a gloss on the general costs power in section 51 of the Supreme Court Act 1981. Amendment No. 16 achieves the same result for civil cases in the Crown court through section 52 of the same Act.

Amendment No. 37 brings clause 93 into line for the magistrates civil jurisdiction. New clause 19 does the same for criminal proceedings in the Crown court and magistrates courts by means of a new section in the Prosecution of Offences Act 1985. Amendments Nos. 13, 15, 38 and 40 apply the power to representatives who are not lawyers. Amendment No. 42 and new clause 19(2) provide the important new safeguard of an appeal from the magistrates to the Crown court. Amendments Nos. 39, 41 and 183 are purely consequential.

I should make clear the relationship between the amendments and the inherent jurisdiction of the Supreme Court. Whenever costs are incurred through the fault of a representative, the power which is the subject of the amendments will be available. It will not be affected in any way by the inherent disciplinary power of the Supreme Court. Conversely, the latter remains intact.

Mr. Bermingham

Does the Attorney-General agree that, when one reads the new clause against the background of other clauses in other Bills on these matters, and when one reads them against one's experience of practice—the last time that we debated the matter I forgot to declare a slight interest as a practising barrister, and a pecuniary interest—one of the greatest problems not addressed by either the new clause or existing legislation is that faced by the representative? The representative, whether for the prosecution or the defence, must act in accordance with the instructions of the plaintiff or defendant. There comes a point when those instructions can create the problems that give rise to the impression of either negligence or incompetence. However, the representative is not in a position to tell the court the true reasons for his or her actions, simply because to do so would be a breach of privilege.

The Attorney-General

One trusts that a course of action followed by an advocate is always at least consistent with, if not the result of, instructions properly given. But negligence is a breach of the duty to take reasonable care. Therefore. all the circumstances must be taken into account. If the complaint is the result of the proper application of an advocate's discretion to instructions properly given to him, that will be a complete defence. The inherent jurisdiction of the court remains intact and the negligence test applicable under these proposals in no way affects any stricter test applying under the inherent jurisdiction.

Mr. Fraser

I want to concentrate on the amendments. There is no disagreement about the principle in the new clause. However, practitioners are entitled to some protection against these provisions, particularly since it is not always as easy as the Attorney-General said for a representative to explain openly exactly what his client has said. For instance, if may be alleged against a representative that the time of the court has been negligently wasted because a case was fixed as a plea of guilty and, at the last moment, it was changed to a plea of not guilty. However, that may have been the result of instructions given by the client. It may be difficult to advance arguments about the relationship between a solicitor or barrister and his client in explaining why the costs have been thrown away. They may have to say to the court, "He told me for 12 months that he was guilty and at the last moment he said that he was not guilty." That may be embarrassing for the person involved and it would not be easy for the representative to put forward that argument.

What is more, despite what the Attorney-General said, there is no suggestion that, if the Crown prosecution service is negligent, it should pay the costs of the other parties. What he is suggesting in those circumstances would not lead to equality between prosecution and defence. In those cases, the costs may be paid out of public funds and not personally by the Crown prosecution service.

The amendments seek to ensure that costs will be awarded against a representative only if they have been negligent or seriously neglected their duty to the court. Also, before any order is made, a legal representative must be given the opportunity to make representations against it so that such matters will not be dealt with in their absence. We advocate that, if such an order is made, there should be a right of appeal against it and that if an appeal is successful, the costs of conducting it ought to be given to the advocate who was wrongly stigmatised by the order.

There was a case last year which was written up in some detail this month in the London criminal practitioners magazine. It involved five cases of solicitors against whom costs were ordered under the existing inherent jurisdiction. When the matter went to the Court of Appeal, it was clear that the fault did not lie with those against whom the orders for costs were made. The appeal had to be financed by the Law Society and, as far as I know, the costs were not paid by the Crown prosecution service, out of public funds or, as might be argued under the circumstances, because he seems to be at the heart of the matter, by the judge.

Such matters should not be undertaken lightly. If such orders can be made against them, legal representatives should be adequately protected in the way we have suggested in our amendments.

Mr. Temple-Morris

I agree with the hon. Member for Norwood (Mr. Fraser). You will have noticed, Mr. Deputy Speaker, that my name accompanies the illustrious names of the right hon. and learned Member for Aberavon (Mr. Morris) and the hon. Member for Norwood on the amendments. I ask the Government to consider the amendments sympathetically. Even if they are not prepared today to think again, they might bear in mind the fact that another place has yet to consider amendments from this House.

As hon. Members know, the basic position of inherent jurisdiction now means that cost orders can be made in circumstances in which there is a serious dereliction of duty to the court. The duty to the court is paramount.

I wish to echo the words of various hon. Members who have mentioned the amount, and often the complexity, of the new clauses and amendments that are still arriving at this late stage. The original intention of the Bill many moons ago was to extend the existing powers to the magistrates court. That was acceptable to the profession. Now, at this late stage, we have a considerable and sudden increase in powers.

My right hon. and learned Friend the Attorney-General said that after consideration it was decided that the overall test should be straight negligence. However, orders can now be made against a legal representative for

any improper, unreasonable or negligent act or omission".

The making of such orders virtually needs the adoption of completely new procedures. It is relatively simple to assess from the bench a serious dereliction of duty to the court, but when we are considering what constitutes any improper, unreasonable or negligent act or omission", the trials within trials in criminal cases will be as nothing compared to trials that may feature legal representatives before minds are made up. There has been little consultation on this because of the late arrival of the new clause, and I ask my right hon. and learned Friend to think again.

The hon. Member for Norwood referred to the specific amendments which bear my name. New clause 19 gives the right of appeal from a magistrates court to a Crown court, and amendment (e) gives the right of appeal from the Crown court upwards. What is sauce for the goose should be sauce for the gander. If there can be an appeal from the magistrates court, there should be an appeal from the Crown court. It is only fair. The justification is that we are dealing with an extremely serious matter for the lawyers involved and the higher the court, the more serious it is.

Amendment (g) deals with the costs of an appeal. At present, under the new clause, an appeal can be made from the magistrates court to the Crown court, but there is no power to award costs to a successful appellant. I pray in aid the words of the Lord Chief Justice in November 1989 when he was considering five cases of Crown court cost orders against solicitors. He expressed concern at the lack of such a power and indicated a preference for a power to award costs from central funds. That is what amendment (g) seeks to do. I hope that my right hon. and learned Friend the Attorney-General will consider it sympathetically. It was raised in another place and the Lord Chancellor was unclear as to what would be the outcome.

Amendment (b) relates the new provision to the court and the client. Therefore, we retain the negligence test of any improper, unreasonable or negligent act or omission and we add in breach of that representative's duty to the court or to his client. That limits the provision and makes it easier for a court to make up its mind. Also, it may prevent the chaos that could occur as a result of the breadth of the original provision. Also, because of a duty to the court or to the client, it removes the other party to any particular proceeding from urging that such an order be made against his adversary. That is important in criminal cases where some heat may have been engendered. It is vital that the defence advocate remains free to defend his client fearlessly as well as to the best of his ability.

Amendment (c) gives the right of appeal from the Crown court to the Court of Appeal.

Amendment (d) is important. It gives legal representatives the right to appear before any cost order is made against them. As my right hon. and learned Friend the Attorney-General knows, Supreme Court rules, order 62, rule 11(4), give such a right of appearance to the legal representative in civil cases. If we are to be rational, that should apply to any criminal proceedings.

It is all very well to say that natural justice will prevail and any judge or judicial officer is bound to allow legal representatives to come before him before he makes such an order, but the very fact that it is mandatory under the Supreme Court rules, but is not mentioned in the Bill, is not right. The absence of that stipulation could encourage the odd, occasional abuse. No one in his wildest dreams suggests that there will be many cases of something so serious, where a legal representative is not given a chance to say what happened and why, but it could happen. That should not be allowed, so my right hon. and learned Friend should treat the new clause sympathetically.

7.30 pm
Mr. Alex Carlile

As a practitioner, and one who occasionally sits as a recorder, I agree entirely with the Government that there was a need for some definition and for consistent standards to be applied. I therefore welcome the general approach that has been taken. However, the common test of simple negligence, as it has already been described this evening, is broad. It lets in a degree of subjectivity, and possibly even capriciousness, which might affect practitioners unfairly.

The test set out in new clause 19 includes a reference to "improper" and "unreasonable" behaviour. Those of us who make the criminal appeal reports part of our bedtime reading will know that every now and then, perhaps once or twice a year, a judge has been known to be unreasonable. Occasionally, a judge does something that, in terms of the quality of justice that he is dispensing, is slightly beyond the bounds of propriety. It would be wrong if the practitioner found himself the victim of a charge of judicial impropriety or unreasonableness against which he had no appeal.

I invite the Government to take the view that there must be a balance of justice which enables the practitioner, who is affected by what could be an extremely damaging order against him, to try to obtain redress from a higher court. A substantial proportion of a practitioner's income in one year might be affected, possibly because the judge had taken an unfavourable view of the client. rather than the lawyer, and allowed that attitude to rub off on the lawyer. There is a serious need for an appeal procedure to accompany the clear definition of the standards to be applied.

Sir Hugh Rossi

I shall follow the comments of the hon. and learned Member for Montgomery (Mr. Carlile) by asking whether there have been any consultations with the Law Society and the Bar council on the wording of the new clause and whether both those organisations have expressed their satisfaction with the wording used.

Having listened to the remarks of the hon. and learned Member for Montgomery, one can envisage a scenario in which a tetchy judge considers a particular line of cross-examination to be wasting the court's time. Judges tend to he short with advocates who do that. I wonder whether the effect of the new clause might be to enable the judge to hold in terrorem over the advocate the possibility that he might lose a day's refresher fees for having taken up too much time on a particular line of cross-examination. That might even apply to the winding-up speech at the end of the trial, when the judge may decide that what is being put to the jury is entirely irrelevant to the jury's consideration, whereas the advocate may feel that he is doing the best that he can for his client. It would be wrong if in those circumstances the advocate could be told that, if he did not sit down and shut up, he would lose a day's fees.

Mr. Bermingham

Earlier, I asked the Attorney-General a specific question—what happens if the advocate seeks to follow instructions and is then the subject of criticism? In my experience, in a long trial, often the question being asked of the witness at the beginning of the trial only assumes relevance in the judge's or jury's minds much later on. What will happen in those circumstances? Is the advocate to be criticised and made the subject of a cost order simply because he has foreseen an issue that may arise and become mature in three weeks time? The provisions as drawn do not protect against that.

I also asked the Attorney-General why the Crown prosecution service was exempt. What is the difference between it and a defence advocate, at whatever level? What protection is there for the independent advocate, whether solicitor or barrister, employed by the Crown prosecution service who is given, as sometimes happens, instructions which cannot possibly be followed because of lack of evidence? Decisions have to be taken. Trials are sometimes dropped on the day. When instructions cannot be followed for those reasons, it is due to negligence not on the part of representatives, but on the part of those who instruct.

It is wrong that a professional person—solicitor, barrister, prosecution or defence counsel—has to set out to clear his or her name, which may cost incredibly large sums of money, depending on where the matter ends up, when it may well have been the judge who was at fault. In a perfect world, all judges would be perfect, but we live in the real world where, as we all know, Monday morning blues can take over and what appears to be the most obscure point turns into a major row and temper s are lost. That happens to us all at some time. Are we then to be told that, although we may ultimately be proved to he in the right, we shall be penalised?

The one thing that the press love is to see an advocate or a lawyer criticised. It makes raging headlines. The Government are saying that they will give a right of appeal in certain cases and allow the matter to be examined. The appellant may be proved right, as in the case of the five London solicitors, who have suffered not just the cost of clearing themselves, but adverse publicity. The press never apologise.

That has happened to me in my professional career as a solicitor. About 15 years ago, the Sheffield Star ran a story saying that I had been excluded from the cells. It made front page headlines on a Saturday night. A mistake had been made, but because it was said in court, it was covered by privilege and I could not sue. A lawyer had made a mistake—he was never briefed again, but that was another matter.

The same thing happened to me at the Bar. Once again, the Sheffield Star—a paper which does not seem to like me very much, although I cannot understand why—stated that a lawyer had been criticised. The Bar council and the senate said that it was perfectly proper and that every step had been taken. They made absolutely no criticism. But a judge had got the wrong end of the stick. What compensation is granted? It may be thought that I have a personal gripe about this matter, and I have. Experience has taught me over the years that Monday morning is the worst day of the week, and not just because it is Monday morning and therefore everyone's worst day of the week.

If the Attorney-General is going to he fair to those who have to perform a public duty standing up in a courtroom, he should be really fair and ensure that when judicial criticism is wrong, there is a right of reparation for the advocate, be he the prosecutor or the defender, in whatever court, at whatever level.

Perhaps the Attorney-General would think along the lines of allowing a little favourable publicity when a lawyer is cleared—at least that would be fair. All of us who practise the law have suffered in this way at some stage. Parliament is supposed to be the protector of the people; perhaps it should also protect those who sometimes have to work in conditions which are unfair and in circumstances in which they are not always popular. Sometimes, what happens on Monday morning can be the result of an argument in another forum on Sunday night in which one did not take part.

The Attorney-General

That was a moving plea from the hon. Member for St. Helens, South (Mr. Bermingham). We are all familiar with Monday morning blues; some of us are familiar with the blues on Tuesday, Wednesday. Thursday and Friday as well. I am afraid that one has to have a broad back as an advocate—to say nothing of what is required of a Law Officer. If one is wrongly criticised, it is my experience that judges are usually fair enough to acknowledge the fact and to make amends.

I wish to deal first with consultation. The amendments establish a simple point of principle—that lawyers are to be liable in costs for the consequences of their negligence. That is quite a popular and simple point. The issue of the appropriate tests for such powers was raised in Committee in another place, when the Law Society sponsored an amendment to what is now clause 93 which would have substituted serious dereliction of duty to the court for the test of the clause.

Before Third Reading in another place, the Lord Chancellor's officials had discussed with the Law Society the Department's own view of the current law and the probability that it would need to be clarified in the Bill. The Lord Chief Justice and the Master of the Rolls having agreed, the Lord Chancellor wrote to the president of the Law Society on 30 April, consulting him on the proposal to establish a simple negligence test in the Bill. The president replied on 6 June, apologising for his delay and expressing his preference for leaving the law alone, but making some specific points on the proposal.

Since then, there has been further correspondence between the Lord Chancellor and the president. The Government amendments reflect the view taken by the Lord Chancellor and his officials during those consultations, so it can be fairly said that there has been consultation with the president.

I take seriously what has been said about the potential gravity for practitioners of the exercise by the court of this power. The power itself is difficult to criticise, but it is of course possible to criticise a hypothetical example of its exercise. The Bill does not provide for an appeal from the exercise by magistrates in a magistrates court of this power to the Crown court. Amendment (e) seeks to introduce that.

We cannot contemplate costs being paid out of central funds if there were to be a successful appeal. It is a principle strongly adhered to that central funds should not be liable in the event of compensation being paid for the exercise of a judicial function. My right hon. and noble Friend and I have, however, given careful thought to whether there should be a right of appeal against the exercise of this power in the Crown court and, having heeded this Opposition amendment, I can tell the House that it will be accepted.

I think that that will be seen as a fair response, but I cannot be so accommodating about central funds, for the reasons that I have given. This is a substantial concession, since amendment (e) lies at the heart of the anxieties that have been expressed.

To answer the hon. Member for St. Helens, South, the position of the Crown prosecution service is as follows. Under section 9 of the Prosecution of Offences Act 1985 there is provision for an order to be made against the service itself when the advocate is an employee of the service, and against the agent personally in the case of an agent. So there is noexemption—

Mr. Bermingham

rose—

7.45 pm
The Attorney-General

I think that I have dealt with that point, if the hon. Gentleman will forgive me.

Amendment (b) would make it a condition for the exercise of the cost power that there be a breach of the representative's duty to the court or his client. The same provision is made for other proceedings by amendments (a) to amendments Nos. 14 and 37. The Government's view is that, those amendments are not correctly conceived.

While the concept of breach of duty to the court or client may well be the foundation for the inherent jurisdiction of the Supreme Court, that formulation can add nothing to the perfectly clear statutory test laid clown in new clause 19 (3)(a) and in the Government's equivalent amendments to clause 4 and clause 93. Indeed, the concept of duty could only either repeat what is already there or reintroduce the danger that it is the Government's purpose to remove—of confusion with some more restricted test.

The effect of amendment (c) would be to apply the cost power against representatives in criminal proceedings to lawyers employed by the Crown prosecution service. I have already dealt with that subject, so I proceed gratefully to amendment (d), which would require regulations to make procedural provisions, first, for a reasonable opportunity for representatives to be heard and, secondly, for no order to be made more than six months after the procedures are disposed of. Originally, clause 93 (4) covered all proceedings in the magistrates court. That subsection requires the magistrates court rule committee to lay down certain procedural requirements for the exercise of the magistrates' new cost power.

New clause 19 separates out criminal proceedings because they are best dealt with in the comprehensive code for costs in criminal proceedings contained in the Prosecution of Offences Act. One consequence is that there will be no requirement for rules or regulations to deal with such procedural matters in relation to criminal proceedings in the magistrates court. But the Government never intended to create any such requirement in relation to the Crown court or any court apart from the magistrates courts.

In general, it is not desirable to require rule committees to make provision which it should be in their power to make. For example, the whole machinery of costs in the High Court as set out in order 62 depends on a general statutory power which it is the rule committee's duty to use to the best possible effect. Clause 93 makes an exception to that general position which is justified, on balance, by the novelty of the magistrates' power to order representatives to pay costs.

The responsibility of the magistrates courts rules committee to regulate the new power is similarly new, but no such novelty applies to the Lord Chancellor's power under the Prosecution of Offences Act to make provision in relation to the costs of criminal proceedings. It is simply unnecessary, and therefore undesirable, to make equivalent provision for criminal proceedings.

Moreover, certain procedural aspects of criminal proceedings have in the past been dealt with by practice direction and it does not seem sensible to require the Lord Chancellor to duplicate whatever might be best dealt with in that way.

I am grateful for the amendments that have been tabled. One at least of them has enabled me to make a substantial concession which I believe goes to the heart of hon. Members' anxieties and I hope that the House will consider that an appropriate way to respond. I must invite the House to reject the remaining amendments.

Question put and agreed to.

Clause read a Second time.

Amendment made to the clause: (e), in line 13, at end insert 'and that a legal or other representative against whom action is taken by the Crown Court under Subsection (1) may appeal to the Court of Appeal.'.—[Mr. Temple-Morris.]

Clause, as amended, added to the Bill.

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