Judicial Review of Haringey's £125 Liability Order costs succeeds

[outlawlgo]

Re: Judicial Review of Haringey's £125 Liability Order costs succeeds

Auditor rejects Haringey’s CT costs refuses report in the public interest council breaks CT law 4 times with impunity

Auditor, not to make an application to the court for a declaration that an item of account is contrary to law.

Grant Thornton, Haringey's external auditor has bottled out. Presumably it doesn't want to put its contract in jeopardy and risk becoming an ex-external auditor to the council. I guess the firm would be committing perjury or something like that if it endorsed the council's costs in a public interest report and is why it refuses to do so.

The appointment of private firms as auditors to local authorities is obviously not in the public interest.

[outlawlgo]

Re: Judicial Review of Haringey's £125 Liability Order costs succeeds

Before even getting started on analysing Grant Thornton's document there's this, which stood out like a sore thumb (page 6):

In our opinion the Council has adopted an approach which is aimed at excluding costs not associated with a summons and whilst the basis would ideally be less subjective there is no evidence to suggest that the Council is deliberately apportioning inappropriate costs to increase the fee charged on summonses as a means to increase the income they receive from charging these costs. We are satisfied that the Council has not set out with any intention to raise income to cover other General Fund expenditure.

Perhaps the auditor hadn't seen this:

Haringey Council's 2004 Audit and Finance Scrutiny Panel Review of Income Collection (now removed from website), details at paragraph 6.11 the relevant matter, as follows:

6.11. Court Costs

6.11.1. The Review Panel found that other councils had obtained agreement to raise Court Costs recharged to non-payers by a significant level. This charge is intended to act as a deterrent to both late and non-payers and enables councils to fund improved recovery measures. The Review Panel concluded that the Benefits and Local Taxation Service could improve performance by ensuring that it agrees the highest possible level of Court Costs to be charged to non-payers

Paragraph 5.10 (second to last bullet point) in Haringey’s Budget Monitoring report 2014/15 dated 16 September 2014 documents that court costs income props up other council expenditure (customer services) by offsetting an otherwise greater overspend:

£400k overspend in customer services predominately due to slippage in delivery of the 2014/15 savings (£660k) partially offset by forecast over achievement of court costs income.

Item 2 (page 15) of Haringey’s Financial Outturn 2011/12 details that an overachievement of court costs income lessened the impact of over spends on salaries and postage costs:

Revs, Bens & customer services Management Costs - the underlying cause of this over spend is the higher than planned demand for services particularly around benefits. This has led to notable over spends on salaries and postage costs. These pressures have mitigated down by an overachievement of income from reimbursement of court costs incurred during recovery activity.

Page 5 of Haringey’s explanation of variances from budget (Outturn 2013/14) documented that it had over achieved with court cost income therefore part of an under spend of £446k which contributed to an under spend of £1.32 million Revenues, Benefits & customer services budget. Incidentally, the council saved, rather than used funding given it by the government to pay council tax benefit claimants:

Revenues, Benefits & customer services - Management - the funding and responsibility for local welfare provision (Support Fund) transferred to local authorities from April 2013. Haringey along with many other authorities has significantly underspent this grant (£877k) and proposes to transfer it to a reserve for drawdown in the future. This is particularly important as the government has confirmed that funding will cease from 2015/16. The remaining under spend (£446k) is due to over achievement of court cost income and receipt of one-off grant funding largely in support of the changes to welfare and universal credit.

[outlawlgo]

Re: Judicial Review of Haringey's £125 Liability Order costs succeeds

Looking again at the letter, it appears that the auditor has been selective about which laws and guidance it deems should be taken into account in the matter, which on the whole concludes that Haringey's approach to its breakdown is reasonable.

You couldn't think of a better example of someone knowing which side their bread was buttered.

Quote from the auditors letter:

Mrs Justice Andrews reasoning in paragraph 45 of her judgement is that it would not be practical for the Council to carry out and provide a detailed calculation of the actual costs incurred in each and every case. Therefore, the exercise has been completed by costing of a standard average case.

One thing that the auditor has conveniently neglected in the letter from which the above is quoted is that the Regulations in fact provide for individual costs and is why the government provided guidance in June 2013 (reiterated from a Council Tax Practice Note in September 1993) stating that 'while it is likely that authorities will have discussed costs with the Clerk to Justices it should be recognised that the Court may wish to be satisfied that the amount claimed by way of costs in any individual case is no more than that reasonably incurred by the authority’. The court would not require satisfying on an individual basis for any arbitrary reason, but because an individual sought to challenge the costs, which is why regulation 35(1) of the Regulations provides that a single liability order may deal with one person and one amount. Regulation 35, so far as is relevant, is as follows:

Liability orders: further provision

35.—(1) A single liability order may deal with one person and one such amount (or aggregate amount) as is mentioned in regulation 34(7) and (8), or, if the court thinks fit, may deal with more than one person and more than one such amount.

Nicolson v Tottenham Magistrates agrees (para 46) in so much as it considers in principle, provided that due consideration is given to the dangers of artificially inflating costs, it may be a legitimate approach to provide an average figure which could be levied across the board in "standard" cases. It does however go further and add that such costs ‘could be amplified in circumstances where there was justification for incurring additional legal and/or administrative costs’.

This approach would require the average figure being derived from the aggregate recoverable costs, which (i) excluded any expenditure that was not common to every application, and (ii) be properly referable to the summons/liability order. That is to say in broad terms the exclusion of those elements which are referred to here (paras 64-101). It would then be open to the council in cases where it incurred additional administrative costs (where they were lawful and there was justification to do so) to amplify the standard costs, but again subject to them always being properly referable to the enforcement process.

In other words, if the council wishes to lessen the administrative burden of calculating the costs in each case (and comply with the Regulations), it must base its costing NOT on a standard average case, but in respect of a taxpayer who simply receives a summons and settles outstanding liability before the date of the hearing without contacting the council to query the demand.

If the Regulations were applied appropriately, the consequences would be that the majority of Staff costs (£914,400), Overheads (£1,165,200) and all of the Council Tax Reduction Scheme (£774,000) are not permissible in respect of re-charging expenditure for instituting the complaint.

What is set-out above should have been enough to alert the auditor that Haringey's claims were not reasonable in the context of the relevant law which governs costs and should therefore have used its discretion to apply to the Court for a declaration that an item of account is contrary to law under section 17(1) of the 1998 Act, and issued a report in the public interest

[judgemental24]

Re: Judicial Review of Haringey's £125 Liability Order costs succeeds

Shooting from the hip on this one

Council Tax liability although passed into statute is still a contract between the resident and the local authority

If the Local Authority is claiming costs for a service under statute then it must Quantify any loss sustained.
Reasonable costs incurred as a generic figure is contrary to contract law.

This will be one of those occassions where public law overlaps private/civil law

Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd

It held that only if a sum is of an unconscionable amount will it be considered penal and unenforceable

I do not know if the above case has been repealed by a new precedent but??

[bizzybob]

Re: Judicial Review of Haringey's £125 Liability Order costs succeeds

The summons costs the councils a fiver at most, but the geedy swine have seen summons costs as a source of extra revenue, so it will not be fair or just until costs are £10 at most.

Not too sure if the Dunlop case was considered in the judgment Haringay was overcharging.

[outlawlgo]

Re: Judicial Review of Haringey's £125 Liability Order costs succeeds

The Institute or Revenues Rating and Valuation (IRRV) are still cashing in on the Reverend's High Court win with a 3 for 2 deal.

Practitioners will be provided with an update on the decision in ‘R (On the application of the Reverend Paul Nicolson) and Tottenham Magistrates 2015’ regarding costs that can be applied for by a billing authority at a liability order hearing. It will look at how billing authorities and magistrate courts have reacted to the decision and in particular, how billing authorities have gone about calculating their costs. There will be an Open Forum for delegates share best / good practice.

The speaker is Gary Watson IRRV (HONS), Deputy Chief Executive, IRRV.

FEES
The fee structure for this series of meetings is as follows:-
£135+vat - IRRV Members
£165+vat - Members of the IRRV Forum or Benefits Advisory Services or Organisational membership
£195+vat - Non-members

[outlawlgo]

Re: Judicial Review of Haringey's £125 Liability Order costs succeeds

It would be understandable, with the obstacles put in the way by the council, Magistrates' court and even the council's auditor contractor, Grant Thornton, if the Reverend at this point gave up.

It has however been announced today on the taxpayers against poverty website that Grant Thornton's decision not to apply to the court for a declaration that an item of account is contrary to law under section 17(1) of the Audit Commission Act 1998 is to be appealed, by seeking a mandatory order through a claim for judicial review.

[outlawlgo]

Re: Judicial Review of Haringey's £125 Liability Order costs succeeds

Magistrates requested that court costs should be waived....

.......Chairman of the bench, Ged Canavan, said: “It is with great reluctance that my colleagues and I have got to issue a liability order.

“Our hands are tied.

“There is little or nothing we can do under the council tax regulations to defer the payments.

“As far as council tax is concerned, there is no leeway - you have to pay it.”

Mr Canavan requested that the court costs should be waived for the case.

Speaking after the hearing, Mr Raine described the application to waive court costs as “a moral victory.”

[outlawlgo]

Re: Judicial Review of Haringey's £125 Liability Order costs succeeds

News article.....

Reverend Paul Nicolson launches second high court challenge against council over summons "overcharging"

A reverend who won a case against the council over charges for not paying council tax is taking them to court again.

Reverend Paul Nicolson has lodged a second High Court claim against Haringey Council over claims the £125 cost of a summons for people who failed to pay their council tax is “too steep”.......

[EXC]

Re: Judicial Review of Haringey's £125 Liability Order costs succeeds

Interesting, thanks.

[outlawlgo]

Re: Judicial Review of Haringey's £125 Liability Order costs succeeds

UNLAWFUL HARINGEY COUNCIL TAX COURT COSTS IN ROYAL COURTS OF JUSTICE ON WEDNESDAY 24TH FEBRUARY – REV PAUL NICOLSON

[outlawlgo]

Re: Judicial Review of Haringey's £125 Liability Order costs succeeds

The Reverend's website, Taxpayers Against Poverty, announces the disappointing news; see also article published in the Ham and High.

Lord Justice Hamblen, one of the two High Court judges hearing the case leaves there no doubt from his statement that his knowledge of the issues were so lacking that a fair hearing was impossible.

[outlawlgo]

Re: Judicial Review of Haringey's £125 Liability Order costs succeeds

Rev Paul Nicolson to appeal High Court judgment

[Amethyst]

Re: Judicial Review of Haringey's £125 Liability Order costs succeeds

If a person is on unemployment benefit - do they not get council tax benefit ?

[outlawlgo]

Re: Judicial Review of Haringey's £125 Liability Order costs succeeds

If a person is on unemployment benefit - do they not get council tax benefit ?

I think a handful of local authorities may allow 100% "reduction".

I suppose before the benefit reforms introduced in 2013 if you were on unemployment benefit you would be entitled to 100% council tax benefit. However, on the introduction of the reforms (bedroom tax etc.), local authorities were left to administer their own schemes (council tax reduction). This meant where a claimant was entitled to 100% council tax benefit before the reforms the council could impose up to around 30% of the tax.

The government incentivised councils by giving additional grants if they kept this amount at or below 8.5% and I believe many councils took up the offer. However, the incentive is no longer offered and naturally local authorities have tended to head towards the 30% maximum.