Gourlay, R (on the application of) v Parole Board [2020] UKSC 50

A life prisoner successfully challenged a Parole Board decision refusing transfer to open conditions but was denied costs. The Supreme Court dismissed his appeal, holding that costs principles are matters of practice for the Court of Appeal, and the established Davies practice applied to the Board.

Facts

The appellant, Mr Gourlay, was a life prisoner. In March 2014, the Parole Board declined both to direct his release and to recommend his transfer to open conditions. He brought judicial review proceedings. The Board took no active part, ticking the box in the acknowledgment of service stating it was a court or tribunal that did not intend to make a submission. At the hearing, the appellant confined his challenge to the refusal to recommend transfer to open conditions, and succeeded: that aspect of the decision was quashed.

The appellant then sought his costs against the Board. King J, applying the practice described in R (Davies) v Birmingham Deputy Coroner [2004] EWCA Civ 207, made no order as to costs, finding the Board had acted in a judicial or quasi-judicial capacity and had not made itself an active party to the litigation. The Court of Appeal (Hickinbottom LJ) dismissed his appeal, considering itself bound by Davies and R (Gudanaviciene) v First-tier Tribunal [2017] EWCA Civ 352.

Issues

Two principal issues were framed on appeal: (i) whether Davies continues to represent the correct approach to costs orders against courts or tribunals; and (ii) if so, whether the Parole Board should be treated as a court or tribunal for that purpose. During the hearing, the Supreme Court raised a prior question: whether these issues raised any question of law, as opposed to matters of practice which might appropriately be left to the lower courts.

Arguments

Appellant

Counsel submitted that Davies was wrongly decided; its rationale had not been adequately justified and had been eroded by changes including the decline of legal aid, reliance on conditional fees, and the introduction of CPR rule 44.2(2) (costs follow the event). The Board should not be treated as a court or tribunal: its recommendation on transfer was merely advisory to the Secretary of State, and it had published a litigation strategy indicating it could concede cases. A failure to concede was, in substance, opposition. Reliance was placed on R (Bahta), R (M) v Croydon LBC and Lord Hope’s observations in JFS. In post-hearing submissions, the appellant argued that if the issue was one of practice, the Court of Appeal had erred by treating Davies as binding.

Respondent

The Board submitted that Davies remained good law and that its principles applied to the Board. The established approach secured judicial impartiality where decisions were challenged, was consistent with CPR rule 44.2(2) (a neutral party not being an ‘unsuccessful party’, and the court retaining discretion to make a different order), and that displacing it would have significant consequences for the conduct of public law litigation.

Judgment

Lord Reed (with whom Lord Hodge, Lord Lloyd-Jones, Lady Arden and Lord Leggatt agreed) dismissed the appeal.

The Supreme Court’s role in matters of costs practice

Section 51 of the Senior Courts Act 1981 confers a wide discretion as to costs, subject to rules of court. Developing principles guiding the exercise of that discretion falls principally to the Court of Appeal. Drawing on Girvan v Inverness Farmers Dairy 1998 SC (HL) 1, Callery v Gray [2002] UKHL 28, Global Torch Ltd v Apex Global Management Ltd (No 2) [2014] UKSC 64 and BPP Holdings Ltd v HMRC [2017] UKSC 55, Lord Reed emphasised that the Supreme Court will ordinarily be slow to intervene in matters of practice, including guidance on costs. The Court of Appeal, hearing many more cases, is better placed to respond to developments with speed, sensitivity and flexibility. The Supreme Court will intervene where there is an error of law (as in Aiden Shipping, Hunt, Cartier and XYZ v Travelers), but appeals solely on costs rarely raise such questions.

Status of Court of Appeal decisions on costs practice

The counterpart of the Supreme Court’s restraint is that the Court of Appeal must keep its decisions on costs practice under review. Such decisions are not binding precedents in the Young v Bristol Aeroplane sense: they establish principles of practice, not propositions of law, and fall outside the rationale of legal certainty underlying strict precedent. There remains a residual judicial discretion. However, previous decisions should only be revisited where there is sufficient reason — such as a material change of circumstances or a decision per incuriam — to avoid repeated re-arguing of the same points and ensure consistency. The Court of Appeal in Gudanaviciene and in the present case had not closed its mind to the arguments but examined them fully before rejecting them; Hickinbottom LJ’s description of Davies as binding did not involve any error of law.

Application to the present case

King J had identified the correct point of central importance: the Board had taken the decision while acting in a judicial or quasi-judicial capacity and had not made itself an active party to the litigation. The question whether a body should be treated as a court or tribunal for costs purposes is itself one of practice. His conclusion that the Board’s failure to respond to the letter before action was regrettable but not improper or unreasonable disclosed no error of law. CPR rule 44.2 (in force, differently numbered, when Davies was decided) is not inconsistent with the Davies approach: a judicial or quasi-judicial body which maintains impartiality by not defending a challenge is not what the drafters had in mind by an ‘unsuccessful party’. The principle of judicial impartiality is reflected in the UN Commentary on the Bangalore Principles of Judicial Conduct.

Legal aid

Section 30(1) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 precludes legal aid funding from affecting the principles on which costs discretion is normally exercised. Lord Hope’s remarks in JFS were obiter, concerned with a protective costs order, and consistent with the principle that legally aided litigants are not treated differently.

Implications

The decision clarifies the relationship between the Supreme Court and the Court of Appeal in matters of costs practice. The Supreme Court will generally not intervene in such matters absent an identifiable error of law; the Court of Appeal bears primary responsibility for monitoring and developing costs practice. Importantly, the judgment clarifies that Court of Appeal decisions establishing principles of costs practice — such as Davies — are not binding precedents in the strict Bristol Aeroplane sense. They may be reviewed by the Court of Appeal itself where there is sufficient reason (such as a material change of circumstances or a decision reached per incuriam), without the need for a further appeal to the Supreme Court. This preserves flexibility for the Court of Appeal to adapt costs practice over time, while discouraging repeated re-litigation of settled principles.

For practitioners, the decision confirms that where a court, tribunal or quasi-judicial body such as the Parole Board adopts a neutral stance in response to judicial review, it will ordinarily not be liable for costs in the absence of exceptional circumstances such as flagrantly improper behaviour. This applies to Parole Board decisions both on release and on transfer to open conditions. Claimants may, where appropriate, make the Secretary of State a party in transfer cases to seek costs against the executive. The principle is grounded in judicial independence and impartiality, and is compatible with CPR rule 44.2, since a neutral judicial body is not an ‘unsuccessful party’. The source of a successful party’s funding, including legal aid, does not alter the ordinary principles governing costs awards.

Verdict: Appeal dismissed.

Source: Gourlay, R (on the application of) v Parole Board [2020] UKSC 50