Incredible view of High Court judge in £75 Council Tax costs

[Adamna]

Re: Incredible view of High Court judge in £75 Council Tax costs

I read somewhere (can't recall where, I've read too much recently) that the (reasonable) forewarning of potential costs is merely in order that both parties may agree a settlement without the necessity for a court hearing, which is exactly what councils are doing - trying to get people to settle 'out of court'. However, this needs to be by agreement, not imposed onto an existing account before the summons is even received.
In my experience it's not irrevocable, but only because I am obstreporous, and probably know more than most who just accept it as a done deal (which is certainly the impression given).
Sometimes the council do remove the summons costs voluntarily as a sweetener to get swift payment (under duress), and people think they should be grateful, never questioning the sum or legality.

[outlawlgo]

Re: Incredible view of High Court judge in £75 Council Tax costs

[2016] EWHC 470 (Admin)

.....Just looking at the first question regarding the summons and whether the costs should be stated as a fixed amount before the case is heard. One significant omission in my mind here is that the court has not inquired into whether the council has already applied the costs to the Appellant's account. The fact that the costs are applied by the time the summons is served makes paragraph 32 questionable, and the representations of the council before hand:

32. I accept that the order for costs did not fall to be made until after the point in time when the basis for the liability order had itself been established but that is no reason for not telling the recipient in advance what minimum claim for costs would be pursued by the Respondent if such a liability order were subsequently to be made....

Paragraphs 75 - 82, Annex A of the attached provides pretty conclusive evidence that the council misled the judge and the judge allowed himself to be.

[Adamna]

Re: Incredible view of High Court judge in £75 Council Tax costs

You wonder why such observations are missed by the court, especially when the QC, sitting as judge, has these glowing references:

This one is interesting
""Very thorough and conscientious, he shows great attention to detail"..."A go-to silk with a calm and reassuring manner, who is very commercial in his advice."
If he has the capability to be thorough and concientious he abandoned it, most likely in some 'commercial' interest or other.....
Or maybe the case was poorly argued. Even so, a LIP should be assisted not walked over.

[charitynjw]

Re: Incredible view of High Court judge in £75 Council Tax costs

You wonder why such observations are missed by the court, especially when the QC, sitting as judge, has these glowing references:

“An exceptional barrister”...“has dealt with some fantastically difficult stuff in his time”...“superb, incredibly commercial and very client-friendly”...“a super brain who thinks of arguments the other side could make but which haven't occurred to them. He is always two or three steps ahead of his opposite number.”
Chambers and Partners 2013

"The embodiment of pure brainpower," "spots arguments the other side doesn't; he is very thorough, and his quiet, confident and assured style belies his tenacity and steely determination."
Chambers and Partners 2011

That must have cost him!
(Naturally I'm referring here to the time & dedication spent in the pursuit of justice! :whistle

[outlawlgo]

Re: Incredible view of High Court judge in £75 Council Tax costs

Totally agree. Also, there can be no question as to whether ANY payment process could be included. It is not part of the enforcement process, it is part of the settlement process. Neither is it part of the costs reasonably incurred in obtaining a summons or a liability order. End of.

You wonder why such observations are missed by the court, especially when the QC, sitting as judge, has these glowing references:

“An exceptional barrister”...“has dealt with some fantastically difficult stuff in his time”...“superb, incredibly commercial and very client-friendly”...“a super brain who thinks of arguments the other side could make but which haven't occurred to them. He is always two or three steps ahead of his opposite number.”
Chambers and Partners 2013

"The embodiment of pure brainpower," "spots arguments the other side doesn't; he is very thorough, and his quiet, confident and assured style belies his tenacity and steely determination."
Chambers and Partners 2011

[Adamna]

Re: Incredible view of High Court judge in £75 Council Tax costs

Totally agree. Also, there can be no question as to whether ANY payment process could be included. It is not part of the enforcement process, it is part of the settlement process. Neither is it part of the costs reasonably incurred in obtaining a summons or a liability order. End of.

[outlawlgo]

Re: Incredible view of High Court judge in £75 Council Tax costs

The judge has exploited the opinion of Justice Andrews in paragraph 46 of Reverend Nicolson's case (see para 76), but without also considering in conjunction the provisions of the Statutory Instrument, which pretty much ensured that the Appellant did not succeed.

76. I accept the Respondent's submissions. The approach contemplated in paragraph 46 of Nicolson is one which takes and aggregates the relevant types of costs incurred in the previous year and divides it up by the number of previous or anticipated number of summonses and to provide an average figure. In my judgment, it is an inevitable consequence of that approach that some detailed types of cost will not necessarily have actually been incurred in the case of a specific defaulter, A, but will have been incurred in the case of other defaulters B, C and D. Provided that the "right types of costs and expenses are taken into account" (see paragraph 46 of Nicolson) that is sufficient. It follows that, if the inclusion of a Chip & Pin device is a reasonable category, or type, of cost to include in the aggregate, it is no answer in an individual case to show that such costs were not incurred in the specific case. Of course, the position would be otherwise if the Respondent had sought to prove its costs specifically by reference to a record of the costs incurred against the Appellant personally. But that is not this case. In this case the Respondent sought to demonstrate the level of costs reasonably incurred in obtaining the liability order against the Appellant by reference to the average cost of doing so against other defaulters. In my view that is consistent with the approach suggested in paragraph 46 of Nicolson.

Although the court was only concerned in this respect with the relatively small amount of expenditure attributed to the Chip & Pin device, the same principle applies to what is likely to be the majority of expenditure which was highlighted by the Appellant (see para 83) in his skeleton argument, "liaising with customers", "answering complaints" etc. These matters were not considered by the judge as they were not matters addressed in the Case Stated. Though which ever way you look at it, the fact that they were not considered means that the outcome is not representative of the facts.

What has been overlooked in taking para 46 of the Nicolson case is that if you were to take that approach, the standard sum would also have to be properly referable to the Regulations (regs 34 and 35). If there is any doubt as to what these regulations provide, clarification has been provided in the Council Tax Practice Note 9: Recovery and Enforcement, produced by the Department of the Environment (1993) and more recently in the 2013 Government good practice guide, for the collection of Council Tax arrears, which both state that

the amount claimed by way of costs in any individual case is no more than that reasonably incurred by the authority.

In that case, given that the amount claimed by way of costs in any individual case must be no more than that reasonably incurred by the billing authority, if the Council wanted to take advantage of streamlining the administration process by applying a standard sum in all cases, in order for it to fully comply with the regulations, it would need to forfeit each element of expenditure it incurs that is not common to every application.

In other words, a standard sum could not exceed that incurred by the authority in a case where the least expenditure is attributed, which would in practice relate to a taxpayer settling his outstanding debt on receipt of a summons without contacting the council on any issue (liaising with customers, answering complaints etc.). Deriving a figure therefore from 'the costs said to be reasonably incurred' which is split between an estimated number of summons (liability orders) does not comply with the regulations.

The least cost case is the only basis on which to determine a standard sum if the aim is to eliminate the administrative burden of calculating the costs in each case, whilst at the same time complying with the regulations which require that the costs be no more than that incurred by the authority in any individual case.

[outlawlgo]

Re: Incredible view of High Court judge in £75 Council Tax costs

Of course the liability order numbers would include those that have also received summonses. Thus there does need to be 2 separate calculations, one for up to the summons stage, one for the further costs of gaining a liability order. Of course both should be detailed enough to be subject to scrutiny.

The judge appears to be understating the seriousness of the matter by the following contained in paragraph 71

This was, ultimately, a civil claim rather than a criminal trial. Accordingly, a degree of latitude should be shown to the nature of the evidence given.

Perhaps then, the issues that are not being properly scrutinised by the High Court would be better served by the attention of the Serious Fraud Office.

Paragraph 75 leaves me questioning my own ability to do simple mathematics because based on the figures we hold, the sum which is quoted as the summons costs in that experiment (cases where no hearing was required) should have been £62.86 not inflated by £10 (£72.86).

75. Although I do not base my decision on it, I observe that, even if the whole amount of £11,397 were excluded from the total it would make only a minor difference to the individual cost that could have been claimed against the Appellant. The costs for those cases where no hearing was required would become £72.86 and for those where a hearing was required would become..

£266,102 (less £11,397) divided by 4,052 = £62.86

[Adamna]

Re: Incredible view of High Court judge in £75 Council Tax costs

Of course the liability order numbers would include those that have also received summonses. Thus there does need to be 2 separate calculations, one for up to the summons stage, one for the further costs of gaining a liability order. Of course both should be detailed enough to be subject to scrutiny.

[outlawlgo]

Re: Incredible view of High Court judge in £75 Council Tax costs

I don't know how the judge's logic works. See paragraph 66 of the judgment:

66. At one point during the hearing before me the Appellant sought to contend that the approach adopted by the Respondent had not been in accordance with the decision in paragraph 46 of Nicolson because the latter required the total annual cost to be divided by the number of summonses in the previous year rather than the number of liability orders made in the previous year. Since the liability orders made would be fewer than the number of summonses issued, the cost per case would have been increased by the Respondent's approach. Again, as the Appellant accepted, this was not an argument which had been raised in the Magistrates' Court. The Respondent opposed the introduction of this point on the grounds that it would require an investigation into the difference between the two outcomes. There was no application to amend the Case Stated to raise the new point and the argument was not further pursued. Had it been, on the basis of the submissions I did hear, I would have been inclined to accept the Respondent's submission that paragraph 46 of Nicolson was to be seen as guidance, rather than an absolute rule, and that an approach based on liability orders fell within the ambit of such guidance in any event.

"The Respondent opposed the introduction of this point on the grounds that it would require an investigation into the difference between the two outcomes.

Not much of an investigation required

It is stated in paragraph 65 that the calculation was based on a total cost of £266,102 which was then divided by the number of Liability Orders (3,496) to arrive at a "standard" cost per defendant.

£266,102 divided by 3,496 = £76.12

However the corresponding number of summonses was 4,052 and so..

£266,102 divided by 4,052 = £65.67

The Appellant was clearly correct and the costs were artificially increased by the Respondent's approach.

[outlawlgo]

Re: Incredible view of High Court judge in £75 Council Tax costs

No I saw it was interesting, and a sound judgment (IMV) but wasn't sure what the 'incredible' bit was...and in what context ( good incredible or bad incredible etc ?) sorry was just asking.xx

"Incredible" I see what you mean. Being ambiguous leaves room for manoeuvre, in this case for changing your mind if you make statements in haste. I'll stick with the meaning I originally intended though (bad).

To kick off with.....

Just looking at the first question regarding the summons and whether the costs should be stated as a fixed amount before the case is heard. One significant omission in my mind here is that the court has not inquired into whether the council has already applied the costs to the Appellant's account. The fact that the costs are applied by the time the summons is served makes paragraph 32 questionable, and the representations of the council before hand:

32. I accept that the order for costs did not fall to be made until after the point in time when the basis for the liability order had itself been established but that is no reason for not telling the recipient in advance what minimum claim for costs would be pursued by the Respondent if such a liability order were subsequently to be made....

Perhaps even more significant is why the court did not call into question the validity of Regulation 34(5) which effectively provides that the parties may agree costs prior to the case being heard. If it had, it would very much likely have come to the conclusion that they are ultra vires the Enabling Act. After-all, it is understood that conventionally a party who is successful in litigation is entitled to costs. The general rule being that costs follow the event and the determination is a matter of judicial discretion. When recovering unpaid sums of Council Tax, the power to award costs lies with the Court on hearing the complaint. (Section 64 of the Magistrates’ Courts Act 1980)

I won't elaborate but anyone wishing to see what I mean, Annex C (around page 102) of this ("see link") and similar as a post on this thread ("see link").

ANNEX C

Statutory Instrument ultra vires

It has become evident from engaging further in this appeal that the Statutory Instrument, the Council Tax (Administration and Enforcement) Regulations 1992 (the “Regulations”) which provide that the parties may agree costs prior to the case being heard may be ultra vires the Enabling Act.

1. The primary legislation laying down the boundaries from which the Regulations derive is the Local Government Finance Act 1992 (the “1992 Act”). Schedule 4 of the 1992 Act provides the necessary powers to enable the Secretary of State, by Regulations, to make provision for the enforcement of Council Tax. The relevant powers conferred on the secretary of state to make provision for obtaining a court order are under paragraph 3 ('liability orders') of Schedule 4 of the 1992 Act.

2. ........

Note: In contrast, the Statutory Instrument which provides for costs in the comparable procedure for the recovery of Business Rates DO NOT provide that if, after the summons has been issued, the outstanding balance and an amount equal to reasonable costs incurred is paid or tendered to the authority, the application shall not be proceeded with.

[Crazy council]

Re: Incredible view of High Court judge in £75 Council Tax costs

i will write it up later, i did a study on it from 2007-2011 at NELC to get the figures accurate.

The costs, can only be the reasonable costs used in the application and administration of the LO between the summons and the appearance at court ( or LO issued ).

Paperwork costs for letters and notice
staff costs for administration of the accounts, after first default notice up to passing it to the baillif ( 2 weeks after LO )
a % towards the cost of teh IT and software
a % towards the offices costs for the time spent ( ONLY ) on liability orders
Court costs ( £ 3 per application )
Staff time for court appeaence

were its fudged ( at least at nelc ), is close to 50% of the LOs are removed/corrected over the next 5 years ( after the app ). So, even there inital caluclations of costs is way overcharged, worse still, those paying the fees, are paying for the staff time to correct there own mistakes.. if you understand

[charitynjw]

Re: Incredible view of High Court judge in £75 Council Tax costs

Yes, whats interesting is the judge starts to give opionins on the costs, i have been looking for cases were they have talked about the cost to give me something to stand against,, our council is different, I have done this calculation properly for our council ( with teh help of my mate elvis ) , LOs costs between £ 17 - 23 .

Hi Crazy council

From your experience, how is the £75 divided up? (just being nosy, lol!)

[Crazy council]

Re: Incredible view of High Court judge in £75 Council Tax costs

No I saw it was interesting, and a sound judgment (IMV) '

Yes, whats interesting is the judge starts to give opionins on the costs, i have been looking for cases were they have talked about the cost to give me something to stand against,, our council is different, I have done this calculation properly for our council ( with teh help of my mate elvis ) , LOs costs between £ 17 - 23 .

[charitynjw]

Re: Incredible view of High Court judge in £75 Council Tax costs

@Crazy council & [MENTION=8136]outlawlgo[/MENTION]

Isn't it all automated anyway - costs must be peanuts!