Coventry Homes (MHC) Ltd v National Care Standards Commission [2002] EWCST 17(NC) (13 June 2003)
- This is an application by the National Care Standards Commission
(NCSC) under Regulation 33(1) Protection of Children and Vulnerable
Adults and Care Standards Tribunal Regulations 2002 (Tribunal
Regulations) for a Costs Order against the Applicants, Coventry
Homes, they having withdrawn their application originally lodged
in 2002.
- Regulation 33(1) states as follows;
"If the Applicant at any time notifies the secretary in
writing, or states at a hearing, that he no longer wishes to pursue
the proceedings, the president or nominated chairman (or at the
hearing The Tribunal) must dismiss the proceedings, and may, subject
to regulation 24(4) and (3) make a costs Order"
- Regulations 24(2) and (3) state as follows;
24(1) "Before making a costs order against a party, the
Tribunal must –
- invite the receiving party to provide to the Tribunal a
schedule of costs incurred by him in respect of the proceedings;
and
- invite representations from the paying party and consider
any representations he makes, consider whether he is able
to comply with such an order and consider any written information
which he has provided
24(2) "When making a costs order, the Tribunal must-
- order the payment of any sum which the parties have agreed
should be paid;
- order the payment of any sum which it considers appropriate
having considered any representations the parties may make;or
- order the payment of the whole or part of the costs incurred
by the receiving party in connection with the proceedings
as assessed
- Also of relevance is Regulation 24(1) which states as follows:
"Subject to regulation 31 and paragraph 2 below, if in the
opinion of the Tribunal a party has acted unreasonably in bringing
or conducting the proceedings, it may make an order (a "costs
order") requiring that party (2the paying party") to
make a payment to the other party ("the receiving party")
to cover costs incurred by the receiving party"
- In the instant case I received written submissions from the
NCSC together with a Schedule of costs incurred. I received a
set of written responses from Coventry Homes and heard oral submissions
from the solicitor for the NCSC and counsel for Coventry Homes.
THE BACKGROUND
- The background to this matter is set out in detail in a decision
made by me on 6 December 2002 (reported on the CST website at
[2002].17.NC) and I do not propose to repeat it here. Suffice
it to say that the case centred around whether the character of
a number of Care Homes had changed such that following automatic
transfer of their registration under the transitional provisions,
they remained Care Homes capable of Registration. The decision
reported above related to a Strike Out application by the NCSC
which I rejected. Accordingly I held a directions hearing on 8
January 2003 to set down a timetable to bring this matter to hearing.
- Both parties were represented at that directions hearing. The
general shape of the final hearing was discussed. It became clear
that the issue would be whether following inspection the NCSC
still considered the homes to be Care Homes. Their representative
gave a time estimate of 5 days for a hearing, the representative
of Coventry Homes gave an estimate of 3 days. Erring on the side
of caution I set the matter down for 5 days commencing 12 May
2003. I then gave directions to timetable the matter to the final
hearing including amongst others the applicant to file statements
by 3 February, the NCSC to file any questions arising from that
by 17 February with the applicants responding by 3 March, NCSC
to file their evidence by 14 April and the applicants responding
further if advised by 28 April.
- On 16 January 2003 the Applicants solicitors wrote to the NCSC
solicitors asking them to clarify their case. There then followed
extensive correspondence all of which was copied to the tribunal.
It appears to me having considered the correspondence that the
applicants solicitors had either misunderstood what was agreed
at the directions hearing or having considered its implications
began to realise the ramifications for them of a final hearing
in which all homes were to be examined. On 17 February the NCSC
raised a number of questions as per the directions. On 28 February
the applicants solicitors wrote to the NCSC solicitors saying
that they would not answer the questions as the NCSC had apparently
not set out their case. On 5 March I issued an "unless"
order in the following terms;
"The purpose of the new regime of rules is to ensure
proper management of cases by the Tribunal. It is for the Tribunal
to set a timetable in consultation with the parties and for the
Tribunal to sanction any variation from this timetable.
Those representing Coventry Homes have chosen to raise new
issues not canvassed at the directions hearing with the NCSC and
to unilaterally ignore the directions made without returning the
matter to the Tribunal. It is for them to set out the evidential
basis of their application and for the NCSC to respond.
Accordingly under the powers given to me by Rule 10 make the
following Order;
1. UNLESS Coventry Homes do file all evidence relied upon
in support of their appeal and respond to the questions raised
by the NCSC by their letter dated 17 February 2003 by 4.00pm on
Friday 14 March 2003 their application shall be deemed to be dismissed.
2. If the application is dismissed in accordance with Order
1 above the NCSC shall serve upon the Tribunal and Coventry Homes
a Schedule setting out details of all costs incurred by them in
respect of the proceedings by 28 March 2003
3. Coventry Homes shall serve upon the Tribunal and the NCSC
details of any representations it wishes to make against the making
of a costs order by 11 April 2003
- On 17 March the solicitors for the applicants formally withdrew
their appeal.
THE SUBMISSIONS
- The initial issue to consider at the Costs hearing was the
basis upon which I was to exercise my discretion under Regulation
33. Mr Grant urged upon me a costs follow the event approach,
namely that the president, nominated Chairman or Tribunal upon
a dismissal should award costs in all but exceptional cases. Mr
McLean urged upon me the approach adopted by the president in
the case of Funcamps v OFSTED [2003]124 EY namely to apply the
criteria set out in Regulation 24(1) above. In the Funcamps case
both parties agreed to this approach so the issue of its applicability
was not canvassed. Mr Grant submitted that the fact that Regulation
33 does not refer to Regulation 24(1) means that it is not applicable
in such cases. I cannot accept this approach. If taken to its
logical conclusion the power to award costs would be greater on
dismissal cases than on cases that go to hearing and are ultimately
litigated at great expense. This cannot be right. I respectfully
adopt the approach of the president in the Funcamps case and agree
with his analysis of the costs regime that applies. In exercising
my discretion in this case therefore, I have to have regard to
the reasonableness of the conduct of the proceedings, including
the decision to commence the proceedings.
THE DECISION
- At the hearing on 6 December I had been critical of the manner
in which both parties had prepared the case to date, particularly
the applicants at paragraph 11 I stated as follows;
". There are a number of unsatisfactory aspects to
procedural issues in this case, which I have taken a reasonably
lenient view on given the newness of the regime with which we
are all now working. In future however I, and other Chairmen
no doubt, will expect all appeals to be commenced through the
use of the appropriate forms. Where the grounds of appeal change
during the course of an appeal application will need to be made
to seek the leave of the Chairman under Rule 32 to change them.
The new grounds of Appeal will be set out in one concise document.
Failure to seek such leave may lead to appeals being dismissed
or costs sanctions imposed. It will be expected that both parties
will agree paginated bundles well in advance of the hearing
and in a complex case such as this to file skeleton arguments
at least a week before the hearing. Furthermore if counsel is
to be instructed they should be so instructed well in advance
of the hearing and provided with all papers in good time to
comply with directions given."
- I considered the costs issue at that stage but as can be seen
took a lenient view. I do not think it would be proper to revisit
that view at this stage. In any event most of the costs incurred
to that date were a direct result of the NCSC strike out application
which they in fact lost. I have therefore disregarded all costs
incurred prior to the 6 December 2002.
- All parties were properly prepared for the hearing on 8 January.
The hearing was productive and I considered that the case was
on course for a final determination. The correspondence thereafter
clearly demonstrates that the appellants were not going to allow
the case to progress to the type of hearing clearly envisaged
at the directions hearing. At no stage did they refer the matter
formally to the Tribunal but instead attempted to litigate by
correspondence. I deprecate that approach. Correspondence between
the parties should remain between the parties and should not be
copied to the Tribunal chair in the hope that it will somehow
influence him or her. There are clear rules of procedure and in
this case I gave liberty to apply to the tribunal regarding matters
arising particularly with regard to the time estimate. I even
had to issue an "unless" order because of failure to
comply with directions.
- It appears to me that from 8 January 2003 the applicants had
no intention of progressing the matter to hearing. I consider
that they conducted themselves unreasonably from this point and
I propose to award the NCSC their costs from this date up to but
not including the costs hearing.
- The difficulty I have is that the Schedule produced by the NCSC
is very short of details. It gives global figures broken down
by Partner and Assistant solicitor times and counsels fees. It
is not broken down in any greater detail. I allowed Mr Grant a
short adjournment to contact his office to see if they were able
to break the figures down more. He was not able to give detail
but estimated these costs as being in the region of £2000 or up
to £4000 to include the costs hearing.
- It is hard to be critical where no guidance has been given
as to what a costs schedule should contain but it may be that
if the schedule had been broken down in greater detail and by
activity that some discussion could have taken place between the
parties to see if agreement could be reached to avoid the need
for a hearing. As it stood the applicants were faced with a costs
claim running into 5 figures they had no choice but to contest
this and have been successful, at least in part. I do not feel
it appropriate therefore to award the costs of this hearing.
- In future cases Chairmen will be greatly assisted by a Schedule
showing what activities have been undertaken by which personnel,
broken down into the various stages of the proceedings for example;
interlocutory preparation, attendance at directions hearing, preparation
for final hearing etc. In this way those challenging an order
can do so by reference to specific sums at different stages of
the proceedings
THE ORDER
- Having considered the matter at some length I have decided
to apply my discretion under Reg 24(3)(b). I consider in the absence
of greater detail, and taking into account the applicants status
and ability to pay the costs, that the sum of £1500 is reasonable
in the circumstances. This sum is exclusive of VAT which is payable
in addition.
