Proceeding with care

The law relating to costs in criminal cases is rarely straightforward. Nowhere is this more apparent than the vexed question of whether costs incurred before the issue of a charge are recoverable. However, a recent decision by the Supreme Court Costs Office (SCCO) has shed new light on how courts are approaching the question of what constitutes 'proceedings' for the purposes of determining costs.

The decision of Master Gordon-Saker in R v Dodd and Ward (T2007 0389) is of particular interest in cases following fatal accidents, which may involve lengthy investigations by the HSE and coroner.

The case concerned the prosecution of Mr Dodd and Mr Ward for a breach of s.7 of the Health and Safety at Work Act 1974. This was brought by the Health and Safety Executive (HSE) following a gas explosion where two people died. The accident occurred early in 2003. Mr Dodd was first interviewed by the police in February 2003 and Mr Ward in October. Some 100 statements were taken by the police, and all of the expert evidence had been supplied and signed off by the end of the year.

A long time coming

In March 2005, the Crown Prosecution Service announced their decision not to bring proceedings against Mr Dodd and Mr Ward. An inquest was held by the coroner in October 2005. It was not until March 2006 that the men were told the HSE intended to bring a prosecution, and they were not formally charged until July 2007.

The defendants applied to the court to stay the indictment, on the grounds that to proceed to trial would be an abuse of process under their right to receive a fair trial. The test to determine this was laid down by Lord Bingham in Att-Gen's Reference (No. 2 of 2001) [2003] UKHL 68. It states that Art 6(1) of the European Convention on Human Rights will only be breached where there was 'serious delay such as to cause serious prejudice to the accused'. In December 2007 at Kingston-upon-Thames Crown Court, HHJ Mitchell held that the delay was sufficient for the defendants to pass this test and imposed a stay on proceedings.

HHJ Mitchell granted costs to the defendants to be paid out of central funds. On assessment by the Determining Officer, costs were disallowed for the period prior to the charges being brought. This was on the basis that s.16(6) of the Prosecution of Offences Act 1985 only granted the costs incurred 'in the proceedings'. Mr Dodd and Mr Ward appealed against this decision.

'Reasonable date'

Granting their appeal, Master Gordon-Saker noted with approval the rule laid down in the Taxing Officers' Notes for Guidance (TONG), which states at para.1.14 that 'costs should normally be disallowed '¦ if they relate to a period before the date when it was reasonable for the accused to consult his solicitor in connection with an anticipated charge'. Additionally he cited the analogy with civil procedure, where costs incurred before the issue of proceedings are taken to be of the total costs of an action.

In R v Mahon [1992] 2 Costs LR 151, Master Pollard stated that 's.16(6) [of the Prosecution of Offences Act 1985] is capable of including expenses incurred before the defendant was charged'. Taken together with the guidance in TONG, Master Gordon-Saker held that the men had acted reasonably in seeking legal advice when it became clear to them that criminal proceedings were likely to be brought against them.

There are a number of implications which arise from the decision, although this case does not set a formal and binding precedent for the courts as a whole. Nonetheless Master Gordon-Saker is a greatly respected costs judge, and his reasoning is likely to be adopted in similar cases. In assessing pre-charge costs, judges may focus increasingly on whether the actions taken by the parties were reasonable or not.

Some guidance may be taken from an analogous test used in the law relating to disclosure of evidence. Courts might be wise to adopt a similar approach, when determining the reasonableness of pre-charge advice, to that used to decide whether a document is covered by litigation privilege. The 'reasonable prospect of litigation' test laid down in Re Highgate Traders [1984] BCLC 151 could form a useful starting point for a determination of reasonableness.

Implications for insurers

The ruling may also affect insurance policies which cover legal defence costs. Many such policies will cover for the costs accrued throughout proceedings. As the decision in Dodd shows, the notion of 'proceedings' can be a nebulous concept. Cautious insurers would be well advised to consider clarifying the wording of such policies to address whether pre-charge costs are covered.

The decision in Dodd brings welcome clarification to a difficult area of law. While it remains to be seen how far courts will adopt this approach, it highlights the pressing need for insurers to properly define the terms of their coverage.