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Cancino (costs � First-tier Tribunal � new powers)
Factual and Procedural Background
This opinion concerns an application for costs brought by the Appellant against the Respondent following the substantive disposal of an immigration appeal. The appeal was initiated by the filing of a Notice of Appeal dated 17 March 2014, relating to a decision dated 05 March 2014. The hearing took place on 20 October 2014, coinciding with the commencement of new Tribunal Procedure Rules (the 2014 Rules). The Appellant sought costs under Rule 9(2)(b) of the 2014 Rules, alleging unreasonable conduct by the Respondent in defending the appeal. The Respondent ultimately withdrew the impugned decision late in the proceedings, after the hearing had commenced, following delays in providing interview recordings and transcripts pertinent to the appeal. The Tribunal was required to determine whether the new costs powers applied to appeals predating 20 October 2014 and, if so, whether the Respondent’s conduct justified an award of costs.
Legal Issues Presented
- Whether Rule 9 of the Tribunal Procedure (First-tier Tribunal) (Immigration and Asylum Chamber) Rules 2014, which grants powers to award costs, applies to appeals initiated before its commencement date of 20 October 2014.
- Whether the Respondent acted unreasonably in defending the appeal, thus justifying an order for costs under Rule 9(2)(b) of the 2014 Rules.
- The proper exercise of judicial discretion in awarding costs under the new Rule 9 framework and the principles governing such awards.
Arguments of the Parties
Appellant's Arguments
- The Respondent acted unreasonably in defending the appeal by failing to provide interview recordings and transcripts in a timely manner despite repeated requests by the Appellant’s solicitors.
- The Respondent’s late provision of key evidence and the consequent withdrawal of the impugned decision on the day of the hearing caused unnecessary costs and delay.
- The Respondent’s conduct lacked a reasonable explanation and warranted a costs order under Rule 9(2)(b) for unreasonable conduct in defending the appeal.
Respondent's Arguments
- The Respondent did not provide a clear explanation for the delay in providing interview materials.
- The Respondent’s representative was unable to clarify the reasons behind the late withdrawal of the impugned decision.
- The Respondent implicitly contended that the new Rule 9 power to award costs should not apply retrospectively to appeals initiated before 20 October 2014.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Ridehalgh v Horsefield [1994] | Definition and principles governing wasted costs orders; discretionary nature of costs awards; standards of improper, unreasonable, or negligent conduct by legal representatives. | Provided the leading authority on wasted costs, guiding the Court’s analysis of Rule 9(2)(a) and (b) powers and emphasizing the discretionary nature of costs awards and the need for a causal nexus. |
| Myers v Elman [1940] AC 282 | Basis for wasted costs orders against solicitors; distinction from disciplinary proceedings; negligence standard suffices. | Supported the Court’s understanding that wasted costs orders do not require proof of dishonesty but serious or gross negligence, grounding the compensatory nature of such orders. |
| Medcalf v Weatherill [2003] 1 AC 120 | Discretion in making wasted costs orders; relevance of mitigatory circumstances. | Endorsed the discretionary approach and the need to consider all mitigating factors before making a costs order. |
| Saif Ali v Sidney Mitchell [1980] AC 198 | Standard of negligence required for wasted costs orders against solicitors. | Clarified the threshold for negligence as conduct no reasonably competent professional would have undertaken, informing the Court’s assessment of conduct under Rule 9. |
| Gill v Humanware Europe [2010] EWCA Civ 799 | Limiting detailed judicial investigation in wasted costs applications; reserved to clearest cases. | Reinforced the Court’s caution against extensive inquiry in costs applications and emphasized reserving such orders for clear cases. |
| Jackson v Cambridgeshire County Council [2011] UKEAT 0402 | Application of wasted costs principles in employment appeals. | Supported the principle that costs orders should be exceptional and fact sensitive. |
| Yew v Kenderaan [1983] 1 AC 553 | Presumption against retrospective penal legislation; fairness and legal certainty. | Informed the Court’s conclusion that the new costs powers should not apply retrospectively to appeals initiated before 20 October 2014. |
| Phillips v Eyre [1870] LR 6 QB 1 | Presumption against retrospective operation of legislation. | Supported the Court’s statutory interpretation rejecting retrospective application of Rule 9(2) costs powers. |
| R v Makanjuola [1995] 3 All ER 730 | General presumption that procedural changes apply to pending proceedings, subject to fairness. | Considered but distinguished due to unfairness and detriment in retrospective application of costs powers. |
| Secretary of State for Social Security v Tunnicliffe [1991] 2 All ER 712 | Fairness in statutory interpretation; presumption against unfair retrospective legislation. | Reinforced the Court’s approach to avoid unfair retrospective application of Rule 9(2). |
| L’Office Chérifien v Yamashita [1994] 1 AC 486 | Scrutiny of practical value and nature of rights in retrospective legislation. | Supported the nuanced approach to retrospective application and fairness considerations. |
| Persaud v Persaud [2003] EWCA Civ 394 | Clarification that wasted costs orders need not be limited to abuse of process. | Informed the Court’s rejection of the argument that wasted costs orders require proof of abuse of process. |
| Mitchells Solicitors v Funkwerk Information Technologies [2008] UKEAT 0541 | Contextual limits on wasted costs orders. | Referenced to clarify the scope of wasted costs orders in tribunal proceedings. |
| In the matter of a Wasted Costs Order made against Joseph Hill and Company Solicitors [2013] EWCA | Emphasized that wasted costs orders should be reserved for the clearest cases. | Supported the Court’s cautionary approach to the exercise of costs powers under Rule 9(2). |
Court's Reasoning and Analysis
The Court began by explicating the new powers under Rule 9 of the 2014 Rules, which grant the First-tier Tribunal (FtT) discretionary authority to award costs, including wasted costs and costs arising from unreasonable conduct. The Court highlighted the exclusive nature of these powers and their discretionary exercise, emphasizing that costs orders are exceptions reserved for clear cases.
The Court examined the statutory framework, including Section 29 of the Tribunals, Courts and Enforcement Act 2007, and relevant case law, principally Ridehalgh v Horsefield, which provides the authoritative test for wasted costs involving improper, unreasonable, or negligent conduct by legal representatives. The Court underscored that the burden of proof rests on the applicant for costs and that the Tribunal must exercise discretion judicially, considering all material factors and fairness.
Regarding the retrospective application of Rule 9, the Court applied fundamental principles of statutory interpretation, including the presumption against retrospective legislation and the principle of fairness. It found no clear intention for Rule 9 to apply to appeals initiated before 20 October 2014. The Court reasoned that applying the new costs powers retrospectively would unfairly penalize parties for conduct occurring before the sanction existed, undermining legal certainty.
On the substantive merits, the Court acknowledged the Appellant’s arguments concerning the Respondent’s delay in providing key evidence and the late withdrawal of the impugned decision. It noted the absence of any reasonable explanation for the Respondent’s conduct and the consequent escalation of costs. The Court found that, had the new Rule 9 powers applied, the Respondent’s conduct would have met the threshold for unreasonable conduct under Rule 9(2)(b), justifying a costs order.
However, due to the appeal’s initiation date preceding the commencement of the 2014 Rules, the Court held that the costs powers did not apply, necessitating refusal of the application. The Court nevertheless provided detailed guidance on the exercise of Rule 9 powers for future cases, emphasizing the fact-sensitive nature of such applications, the importance of judicial discretion, and the procedural safeguards required to ensure fairness.
Holding and Implications
The Court REFUSED the Appellant’s application for costs under Rule 9(2)(b) of the Tribunal Procedure (First-tier Tribunal) (Immigration and Asylum Chamber) Rules 2014 on the basis that the Rule 9 powers to award costs do not apply retrospectively to appeals initiated before 20 October 2014.
The direct effect of this decision is that no costs order was made against the Respondent in this case. The Court clarified that the new costs regime applies exclusively to appeals filed on or after 20 October 2014, thereby preserving fairness and legal certainty. No new precedent was created beyond confirming the non-retrospective application of the Rule 9 costs powers and providing authoritative guidance on their exercise. The decision serves as a detailed interpretative and procedural framework for future costs applications under the 2014 Rules within the Immigration and Asylum Chamber.
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