Awards of costs in immigration tribunal appeals
For the first time, it will now be possible for the immigration tribunal to make awards of costs in statutory appeals. The power is conferred by the Tribunal Procedure (First-tier Tribunal) (Immigration and Asylum Chamber) Rules 2014 (SI 2014/2604), specifically by rule 9. The new rules come into effect on 20 October 2014 and apply immediately to any outstanding or future immigration appeal.
One important consequence to note of the change to the procedure rules to the First-tier Tribunal Immigration and Asylum Chamber is that the Upper Tribunal also inherits the same power to award costs, presumably also as of 20 October 2014 given the commencement of the FTT rules. See rule 10(1)(b) of the Tribunal Procedure (upper Tribunal) Rules 2008 as amended.
There are three circumstances where costs can now be awarded:
- Repayment of appeal fee
- Wasted costs against a representative
- Costs for unreasonable conduct against a party
Unlike conventional civil proceedings, for example in judicial review cases or in the Court of Appeal, there is no rule that costs will normally follow the event, i.e. that the loser will normally have to pay the costs of the winner. Instead, awards of costs should be relatively unusual, assuming that most parties do not regularly act unreasonably. It is also important to note that there is a clear procedure to be followed which affords some safeguards to parties and representatives.
For Scottish readers, here I refer to costs in my own text for convenience but in Scotland that should be read as a reference to expenses.
The first situation in which costs can be awarded is the familiar one of ordering payment of the costs of an appeal fee to a successful appellant. This is set out at rule 9(1) and applies only where the tribunal allows an appeal:
(1) If the Tribunal allows an appeal, it may order a respondent to pay by way of costs to the appellant an amount no greater than—
(a) any fee paid under the Fees Order that has not been refunded; and
(b) any fee which the appellant is or may be liable to pay under that Order.
Note that where the Home Office withdraws a decision, under the new rule 17(2) it may be possible to persuade the tribunal to continue with the appeal and allow it, thus retaining the power to award the costs of the appeal fee. Prior to 20 October 2014 a withdrawn decision automatically terminated an appeal without it being allowed and the appeal fee was forfeited.
The new rule 17(2) provides as follows:
The Tribunal must (save for good reason) treat an appeal as withdrawn if the respondent notifies the Tribunal and each other party that the decision (or, where the appeal relates to more than one decision, all of the decisions) to which the appeal relates has been withdrawn and specifies the reasons for the withdrawal of the decision.
It is the “save for good reason” exception that might be used to argue that an appeal should be permitted to proceed. Whether recovery of the appeal fee is considered by a judge to be sufficiently good reason under rule 17(2) for that judge to have to write a proper and reasoned determination is questionable.
It may also be worth considering whether choosing to pursue an appeal that would otherwise be abandoned might carry adverse costs consequences under the other costs provisions. It might, for example, be considered by some judges to be unreasonable conduct of an appeal. It is very strongly arguable that this would not be a proper approach but there is likely to be a period of serious uncertainty as the immigration judiciary get to grips with their new powers.
Wasted costs against representatives
The tribunal may now make a wasted costs order against a legal or other representative under rule 9(2)(a):
under section 29(4) of the 2007 Act (wasted costs) and costs incurred in applying for such costs
The critical part of section 29 of the Tribunals, Courts and Enforcement Act 2007 is actually for our immediate purposes subsection (5), which provides the definition of wasted costs supplemental to the subparagraph (4) power to award wasted costs:
“wasted costs” means any costs incurred by a party—
(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
(b) which, in the light of any such act or omission occurring after they were incurred, the relevant Tribunal considers it is unreasonable to expect that party to pay.
The full text is available for reference here as a drop down:
“Improper, unreasonable or negligent”
The key case on wasted costs is still that of Ridehalgh v Horsefield & Anor  EWCA Civ 40. Replete with reference to Bleak House, then Master of the Rolls Sir Thomas Bingham reviews the origins and development of the wasted costs jurisdiction and gives guidance on the meaning of the critical terms “improper, unreasonable or negligent act or omission”:
“Improper” means what it has been understood to mean in this context for at least half a century. The adjective covers, but is not confined to, conduct which would ordinarily be held to justify disbarment, striking off, suspension from practice or other serious professional penalty. It covers any significant breach of a substantial duty imposed by a relevant code of professional conduct. But it is not in our judgment limited to that. Conduct which would be regarded as improper according to the consensus of professional (including judicial) opinion can be fairly stigmatised as such whether or not it violates the letter of a professional code.
“Unreasonable” also means what it has been understood to mean in this context for at least half a century. The expression aptly describes conduct which is vexatious, designed to harass the other side rather than advance the resolution of the case, and it makes no difference that the conduct is the product of excessive zeal and not improper motive. But conduct cannot be described as unreasonable simply because it leads in the event to an unsuccessful result or because other more cautious legal representatives would have acted differently. The acid test is whether the conduct permits of a reasonable explanation. If so, the course adopted may be regarded as optimistic and as reflecting on a practitioner’s judgment, but it is not unreasonable.
…we are clear that “negligent” should be understood in an untechnical way to denote failure to act with the competence reasonably to be expected of ordinary members of the profession.
Bingham MR goes on to hold that the terms may well overlap:
We were invited to give the three adjectives (improper, unreasonable and negligent) specific, self-contained meanings, so as to avoid overlap between the three. We do not read these very familiar expressions in that way. Conduct which is unreasonable may also be improper, and conduct which is negligent will very frequently be (if it is not by definition) unreasonable. We do not think any sharp differentiation between these expressions is useful or necessary or intended.
It is then made abundantly clear that wasted costs should not be awarded against a representative merely for pursuing a hopeless case. The cab rank rule is cited in relation to barristers and the public policy reasons of affording representation to the unpopular and unmeritorious in relation to solicitors. Legal representatives will advise their clients of perceived weakness in a case but clients are free to reject such advice and it is rarely if ever safe for a court to assume a hopeless case is being litigated on the the advice of the lawyers involved.
It is, however, one thing for a legal representative to present, on instructions, a case which he regards as bound to fail; it is quite another to lend his assistance to proceedings which are an abuse of the process of the court.
Whether instructed or not, a legal representative is not entitled to use litigious procedures for purposes for which they were not intended, as by issuing or pursuing proceedings for reasons unconnected with success in the litigation or pursuing a case known to be dishonest, nor is he entitled to evade rules intended to safeguard the interests of justice, as by knowingly failing to make full disclosure on ex parte application or knowingly conniving at incomplete disclosure of documents. It is not entirely easy to distinguish by definition between the hopeless case and the case which amounts to an abuse of the process, but in practice it is not hard to say which is which and if there is doubt the legal representative is entitled to the benefit of it.
Although they arise in the context of judicial review rather than statutory appeals, the terms of the wasted costs jurisdiction are the same and therefore the line of Hamid cases and in particular the case of R (on the application of Okondu and Abdussalam) v Secretary of State for the Home Department (wasted costs; SRA referrals; Hamid) IJR  UKUT 377 (IAC) (examined in more detail later) include some examples where judges have taken the view that the conduct of the representatives is such that wasted costs orders were appropriate.
Helpfully for those responsible for advocacy in the tribunal, Bingham MR later in the judgment refers to the traditional Rondell v Worsley immunity of the advocate from a negligence action buy his or her own client and goes on in relation to wasted costs orders:
Any judge who is invited to make or contemplates making an order arising out of an advocate’s conduct of court proceedings must make full allowance for the fact that an advocate in court, like a commander in battle, often has to make decisions quickly and under pressure, in the fog of war and ignorant of developments on the other side of the hill. Mistakes will inevitably be made, things done which the outcome shows to have been unwise. But advocacy is more an art than a science. It cannot be conducted according to formulae. Individuals differ in their style and approach.
It is only when, with all allowances made, an advocate’s conduct of court proceedings is quite plainly unjustifiable that it can be appropriate to make a wasted costs order against him.
It’s all under control…
In Ridehalgh v Horsefield Bingham MR goes on knowingly to make two potentially contradictory points. One is that in legal aid cases it is unlikely that a costs award will be made against a legally aided party, therefore the risk of litigation to the client is lower, and a representative must be careful not to take advantage of that fact. However, he also points out that because costs cannot usually be recovered against the client, there is more incentive for a victorious opposing party and representative to pursue wasted costs against the lawyer rather than normal costs against their client.
Given that costs will not normally be awarded anyway and legal aid is now so rarely available in immigration appeals, these legal aid issues perhaps only touch on a small number of cases, if any. However, it might be thought that the same caution should be exercised by legal representatives given that it will rarely be possible to enforce costs orders against unsuccessful immigration law clients.
Privilege and client confidentiality
Ridehalgh v Horsefield recognises the difficulty which lawyers may face caused by the rules of client confidentiality and professional privilege. The privilege is that of the client and is not that of the lawyer, so it is not for the lawyer to waive it without permission from the client. The client may well refuse permission in this context, because to do so might expose the client to a costs order rather than the lawyer. This is something that judges contemplating a wasted cost application should very carefully consider:
Judges who are invited to make or contemplate making a wasted costs order must make full allowance for the inability of respondent lawyers to tell the whole story. Where there is room for doubt, the respondent lawyers are entitled to the benefit of it. It is again only when, with all allowances made, a lawyer’s conduct of proceedings is quite plainly unjustifiable that it can be appropriate to make a wasted costs order.
The issue arose again in the case of Medcalf v Weatherill & Anor  UKHL 27. Counsel for a defendant party alleged fraud by the claimant and his solicitors in the conduct of the action before the judge. An action for wasted costs for the preparation of a defence to this allegation was brought on the grounds that there was no basis for the allegation in evidence and it was therefore improperly made according to the Bar’s Code of Conduct. Counsel pleaded in their defence that they were precluded from giving a full answer to a wasted costs application because of legal professional privilege.
With Lord Bingham giving the leading judgment, the House of Lords held a wasted costs order in these circumstances should be exceptional and went on:
Where a wasted costs order is sought against a practitioner precluded by legal professional privilege from giving his full answer to the application, the court should not make an order unless, proceeding with extreme care, it is (a) satisfied that there is nothing the practitioner could say, if unconstrained, to resist the order and (b) that it is in all the circumstances fair to make the order.
Section 29 TCEA 2007 specifically refers to costs incurred as a result of acts or omissions that are improper, unreasonable or negligent. There must therefore be a causal link between the alleged acts or omissions and the incurring of the costs by the other side. For example, the costs of an appeal hearing might not be recoverable as wasted costs if the appeal hearing would have occurred anyway. Conversely, where the costs of the appeal hearing might have been avoided if the representative had not acted in a way that was improper, unreasonable or negligent then wasted costs might well be recoverable.
Where there is conduct that is improper, unreasonable or negligent but no additional costs are incurred, a reference to the appropriate body should be considered instead:
Where the conduct is proved but no waste of costs is shown to have resulted, the case may be one to be referred to the appropriate disciplinary body or the Legal Aid authorities, but it is not one for exercise of the wasted costs jurisdiction.
This is something that we have seen repeatedly in the Hamid line of cases in the context of immigration judicial review proceedings.
Example in an immigration context
In Okondu, a generally more thoughtful and balanced case than some of the prior Hamid-type cases, the court held that:
The Upper Tribunal recognises that applicants with weak cases are entitled to seek to advance their case and have it adjudicated upon; that is a fundamental aspect of having a right of access to a court. But there is a wealth of difference between the advancing of a case that is held to be unarguable in a fair, professional and proper manner and the advancing of unarguable cases in a professionally improper manner.
A wasted costs order was made. Wasted costs were requested by the Secretary of State against the claimant representatives on the basis that assertions and submissions made in the grounds for judicial review were “at best negligent or at worst, deliberately misleading“. It transpired that the representative in question had been making submissions that were on any reading unjustified by and indeed contrary to the evidence in the individual case and in fact had been doing so in a range of similar cases that were clearly what might colloquially be described as “cut and paste jobs”. The grounds were described by the tribunal as “grossly misleading”. A referral to the Solicitors Regulation Authority was made as well as a wasted costs order.
It may be worth noting that the criticism was of misrepresentation of the evidence, not poor or misconceived legal submissions. However, representatives should take note of the earlier case of R (on the application of B & Anor) v Secretary Of State For The Home Department  EWHC 3770 (Admin) in which the competence of Counsel was heavily criticised, although no wasted costs order was ultimately made.
Unreasonable conduct by a party
The full power to award costs against a party is set out at rule 9(2)(b):
if a person has acted unreasonably in bringing, defending or conducting proceedings.
A “person” would plainly include the Secretary of State for the Home Department or one of her officials excessing delegated powers.
This test and formula of words has not been plucked from thin air. It is similar to the costs power that has existed for many years in other tribunal proceedings in other areas of law. There are therefore precedents that we can look to for guidance at when the power might be exercised.
There are important and instructive points of difference, though. The Employment Tribunal Rules conferred a power to award costs where proceedings were “misconceived”, for example, and no such power has been included for the immigration tribunal, presumably deliberately. However, the line of cases on that power sometimes also refers to unreasonable conduct, as in the case of Scott v Commissioners of Inland Revenue  ICR 1410 in which Sedley LJ gave judgment.
The meaning of “unreasonable” was for example considered in the case of Baldwin (Costs decision)  UKFSM FSM028 in the Financial Services and Markets Tribunal. The parties submitted that the standard was that of Wednesbury unreasonableness but this approach was rejected by the tribunal, although the applicable procedure rules more clearly than the current FTTIAC rules imparted the judgment about what was reasonable or not to the tribunal itself.
Either party in the immigration tribunal might seek to withdraw an appeal, and depending on the circumstances the other party might then seek costs incurred up to that point in pursuing or defending the action. As already discussed, though, costs are not automatic the party against whom costs are sought must have acted unreasonably in bringing, defending or conducting the appeal.
One example in the Employment Appeal Tribunal is that of Turning Point Scotland v Perry & Anor (Practice and Procedure : Costs)  UKEAT 0049_11_1804. In this case, a claimant had lodged a claim based on an assertion she was not being paid the national minimum wage. The defendants requested further information to ascertain the basis of claim and threatened an application for costs. The claimant later withdrew the claim on the basis of advice from counsel.
The tribunal made an award of costs on the the basis that
these claims were misconceived, it was unreasonable to raise them and they were conducted in an unreasonable manner.
How far this is transferrable to immigration proceedings where the party should have realised that the appeal should be conceded or never brought will be interesting to see in the coming months.
Process and procedure
There are clear procedural protections for parties built into the new procedure rules which require notice to be given and for an opportunity to make representations to be afforded. The relevant parts of rule 9 are as follows:
(3) The Tribunal may make an order under this rule on an application or on its own initiative.
(4) A person making an application for an order for costs—
(a) must, unless the application is made orally at a hearing, send or deliver an application to the Tribunal and to the person against whom the order is sought to be made; and
(b) may send or deliver together with the application a schedule of the costs claimed in sufficient detail to allow summary assessment of such costs by the Tribunal.
(5) An application for an order for costs may be made at any time during the proceedings but must be made within 28 days after the date on which the Tribunal sends—
(a) a notice of decision recording the decision which disposes of the proceedings; or
(b) notice that a withdrawal has taken effect under rule 17 (withdrawal).
(6) The Tribunal may not make an order for costs against a person (in this rule called the “paying person”) without first giving that person an opportunity to make representations.
From this we can see that a costs application can be made by a party or can be considered by the tribunal on its own initiative. There is also a deadline for making costs applications, which is 28 days after the tribunal sends notice of a decision disposing of the proceedings (which will normally be a full determination but could be a rejection of an appeal on grounds of jurisdiction or being out of time) or 28 days after the notice of withdrawal takes effect, which if we consult rule 17 we can see will be under 17(3) where there is a notice to this effect from the tribunal.
Assessment of costs
The assessment process is addressed at rule 9(7):
(7) The amount of costs to be paid under an order under this rule may be determined by—
(a) summary assessment by the Tribunal;
(b) agreement of a specified sum by the paying person and the person entitled to receive the costs (in this rule called the “receiving person”);
(c) detailed assessment of the whole or a specified part of the costs (including the costs of the assessment) incurred by the receiving person, if not agreed.
Summary assessment will be far preferable for a party seeking costs as it is a far less involved process than attempting to reach agreement or making submissions for the purpose of detailed assessment. However, this will not be possible without a pre-prepared schedule of costs (rule 9(4)(b)) and without proper notice having been given to the other side and application having been made to the tribunal.
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