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

[Legal Beagles]

Rev Paul Nicholson, who lives in Campbell Road, Tottenham, refused to pay his council tax in protest over the hundred per cent council tax benefit being scrapped.The 82-year-old, who is known as the ‘vicar of Dibley’, as the popular television show was filmed in the church where he was parish vicar, was then hit with... Read more »
Read More -> Reverend Paul Nicholson challenges Haringey Council’s ‘unfair’ costs in court


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[Amethyst]

Re: Reverend Paul Nicholson challenges Haringey Council’s ‘unfair’ costs in court

http://www.bailii.org/ew/cases/EWHC/...2015/1252.html

This application for judicial review of the decision taken by the Magistrates must therefore succeed. I was told that since the hearing the order for costs against the Claimant has been withdrawn, but that does not render the proceedings academic; as I have said, it raises issues of wider public importance. Had the order not been withdrawn, I would have quashed it. Since it has been withdrawn, I will declare that the order was unlawful, because:

i) the Magistrates did not have sufficient relevant information before them to reach a proper judicial determination of whether the costs claimed represented costs reasonably incurred by the Council in obtaining the liability order;

ii) the Magistrates erred in law by failing to make further inquiries into how the £125 was computed and what elements it comprised; and

iii) the Claimant was denied a fair opportunity to challenge the lawfulness of the order before it was made, by reason of the failure to answer his requests for the provision of information as to how the sum of £125 was arrived at.

[Debt Camel]

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

Decision: http://www.bailii.org/ew/cases/EWHC/...2015/1252.html

From the decision:

"This case raises issues of significant public interest to both council tax payers and local authorities relating to the costs sought by local authorities with regard to the enforcement of unpaid council tax.
...
The issue at the heart of this claim is what is required, prior to making an order for the costs claimed, to satisfy the court that the requirements of the Regulation are met, i.e. that those costs have been reasonably incurred by the local authority in obtaining the liability order.
...
According to the Claimant, whose evidence is unchallenged, the Council's representative stated that the sum of £125 had been agreed between the Council and the court by email in March 2010. The Claimant was not shown the email, nor was he given any breakdown or rationale for the "agreed" level of costs. Moreover, neither the Council's representative nor the court provided him with any explanation of how the figure of £125 represented costs reasonably incurred in obtaining the liability order. The Magistrates just told him that since he personally had the means to pay the costs, they would approve the liability order.
The Magistrates proceeded to make the order in the sum claimed against the Claimant. They then made identical costs orders against a large number of other people against whom liability orders were made, mostly in their absence.
...
I will declare that the order was unlawful, because:
i) the Magistrates did not have sufficient relevant information before them to reach a proper judicial determination of whether the costs claimed represented costs reasonably incurred by the Council in obtaining the liability order;
ii) the Magistrates erred in law by failing to make further inquiries into how the £125 was computed and what elements it comprised; and
iii) the Claimant was denied a fair opportunity to challenge the lawfulness of the order before it was made, by reason of the failure to answer his requests for the provision of information as to how the sum of £125 was arrived at."

This is not a decision that £125 is unreasonably high. Nevertheless it will hopefully make a lot of Local Authorities reconsider if the amounts they are charging are reasonable if they have to explain how they are arrived at.

[des8]

Re: Reverend Paul Nicholson challenges Haringey Council’s ‘unfair’ costs in court

........... and I really appreciated the final paragraph:

1. Ms Henderson submitted that if I were to reach the conclusion that the Magistrates fell into error, I should not make an order for costs against the Council, which is not a Defendant but only an Interested Party. It was not the Council's fault that the Magistrates reached an unlawful decision. Whilst I am very grateful that the Council chose to instruct Ms Henderson to appear at the hearing, her instructions were to try to defend the indefensible. It was the Council that benefited from the unlawful decision, and they were responsible for the failure to adhere to the Guidance, which had been promulgated before the hearing in the Magistrates' Court took place. Their representative should have been in a position to provide the breakdown of the costs requested at the hearing. If that information had been forthcoming, then these proceedings would not have been necessary. In principle, therefore, there is no injustice in ordering the Council to pay the Claimant's pro bono costs, and the fees, costs and expenses that the Claimant incurred earlier, whilst acting in person. There is no good reason to depart from the normal rule that the party who unsuccessfully resists the application should pay the costs of the other party.

[bizzybob]

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

£25 is too high, it costs them less than a fiver in reality.

[outlawlgo]

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

Although there's no ruling in respect of the amount of costs imposed by Haringey, paragraphs 34 and 35 of the Judgment highlights the area, agreeing with analysis (paras 152-161) of some councils that suggests they consider to be entitled (unlawfully) to include in their costs.

"34. As a matter of straightforward construction of Regulation 34(7) that means that the Magistrates must be satisfied:

i) that the local authority has actually incurred those costs;

ii) that the costs in question were incurred in obtaining the liability order; and

iii) that it was reasonable for the local authority to incur them.

35. It is clear that there must be a sufficient link between the costs in question and the process of obtaining the liability order. It would obviously be impermissible (for example) to include in the costs claimed any element referable to the costs of executing the order after it was obtained, or to the overall administration of council tax in the area concerned.

[Amethyst]

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

Couple threads on this - have merged xx

[Crazy council]

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

Like timing from heaven, but a massive all night rewrite is no the cards for me

[outlawlgo]

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

It's interesting what Haringey's representative is quoted to have said in paragraph 49 of the Judgment, particularly that highlighted below:

"49. The memorandum goes on to explain that the £70 would enable the local authorities to recover the costs of court fees and"a reasonable mount for administration costs". It explains why the limit was not set at £35 for each of the two stages, on the basis that during the consultation process "several local authorities pointed out that the greatest amount of work is incurred before the initial summons is issued and argued that the charge should be higher at this stage." Ms Henderson said that this explained why in the case of some local authorities, such as the Council in the present case, the costs were set at the same figure regardless of whether payment was made after the summons was issued. The costs of obtaining a liability order were very small in comparison with the costs incurred in connection with the issue of the summons.

Contrast that with what Chiltern District Council stated in its 16 March 2010 Cabinet report on its review of Court Costs in respect of unpaid Council Tax and Business Rates:

4. .......Most of the costs the Council incurs arise from the application for a liability order at Court and the additional work required to secure payment once we have the liability order.

Who is telling the truth?

[Crazy council]

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

Hi [MENTION=8136]outlawlgo[/MENTION]

Full cost of NELC system for the application of LOs. £ 8 - £ 10. Now calculated by me. Will email you later, tell you were i am with it. Court staff are considering there actions at the mo.

[Amethyst]

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

Ours charge £55 .... I know as we had a letter last week lol.

They are removing it if we pay by the end of the month.

[outlawlgo]

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

Hi @outlawlgo

Full cost of NELC system for the application of LOs. £ 8 - £ 10. Now calculated by me. Will email you later, tell you were i am with it. Court staff are considering there actions at the mo.

Be interesting to compare a realistic calculation with NELC's breakdown.

I take it then that if obtaining the Liability Order costs between £8 and £10, then the cost solely for instituting the Summons must be lower.

As the judgment in Haringey's case has established, the summons costs must not include any expenditure in respect of further work in obtaining the Liability Order or 'to include in the costs claimed any element referable to the costs of executing the order after it was obtained...'.

[outlawlgo]

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

The Reverend's meeting with the auditor will be tomorrow (5 June 2015).

Haringey Independent

[Crazy council]

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

All councils cost will be different, but will be in a grouping

The larger the council ( as in population ), the smaller the costs should be. Most councils that i have looked at, use the same type of software, At NELC. What's interesting, is as soon as a council declares costs, they can be checked.

My monies on £ 8 - £ 10,

Further, i wander how the auditors will account for costs in relation to corrections on accounts by the authority. Ie who pays for there mistakes, everybody, or just the people that get LOs,

[outlawlgo]

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

...Further, i wander how the auditors will account for costs in relation to corrections on accounts by the authority. Ie who pays for there mistakes, everybody, or just the people that get LOs,

I'm hoping that the auditor comes to the conclusion that 'reasonably incurred costs' does not include an amount for bad debt, under which category I consider 'mistakes made by the council' falls under.

It is evident from a number of expenditure breakdowns that the standard sum recharged to taxpayers in respect of summons costs / liability order include an element of bad debt brought about by defendants, who for example, may have no means to pay. Those debtors are then being subsidised by those from whom payment is more easily recovered.

This is confirmed by the fact that many councils have a significant difference between the number of summons requested, and the number of summons requested where costs are applied.

The average individual costs are determined from dividing its gross expenditure by an estimated number of summons requested where costs applied.

An example (NELC). The dividing figure used in its 2013/14 calculation was 10,000, but the figure submitted to CIPFA relating to the number of summonses issued in 2013/14 was 17,197.

The reason for the difference does not really matter, nor is it of any consequence that the authority has not recovered its costs (from the defendant summonsed) in 7,197 cases.

The matter that is of concern however, is that NELC has incurred costs in respect of each one requested, which in over 7,000 cases it has been unable to recover from the defendant summonsed. Instead it added that expenditure to the costs of those against whom court proceedings are brought and the costs paid.

It is obvious that the defendants actually paying the costs are paying an inflated sum to either compensate for the councils error of judgement or subsidise the costs of those others having them waived.