BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £1, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!

Royal Courts of Justice

The Strand

London WC2

Tuesday 29th October 1996

B E F O R E :

LORD JUSTICE KENNEDY

MR JUSTICE MCKINNON

and

MR JUSTICE JOHNSON

- - - - - - - - - - - -

R E G I N A

- v -

ASSOCIATED OCTEL COMPANY LTD

- - - - - - - - - - - -

Computer Aided Transcript of the Stenograph Notes of

Smith Bernal Reporting Limited

180 Fleet Street, London EC4A 2HD

Tel No: 0171 831 3183 Fax No: 0171 831 8838

(Official Shorthand Writers to the Court)

- - - - - - - - - - - -

MR JL HAND QC appeared on behalf of the Appellant

MR HUGH CARLISLE QC and MR A LONG appeared on behalf of the Crown

- - - - - - - - - - - -

JUDGMENT

( As Approved by the Court )

- - - - - - - - - - - -

Crown Copyright

Tuesday 29th October 1996

MR JUSTICE MCKINNON: On 20th December 1995, in the Crown Court at Chester, the appellant pleaded guilty to count 1, failing to ensure the safety at work of employees, and on 22nd January 1996 pleaded guilty to count 2, conducting an undertaking so as to expose persons to risk. On 2nd February 1996 the appellant was fined £75,000 on each count and was ordered to pay £142,655.33 prosecution costs.

The appellant appeals against sentence by leave of the single judge.

This appeal raises a short but important point as to costs in criminal cases. The appellant owns and operates premises at Ellesmere Port in Cheshire where it manufactures additives for petrol. On 1st February 1994, as a result of some failure in the appellant's plant, ethyl chloride escaped into the atmosphere, vaporised and ignited, causing a serious fire which severely damaged the ethyl chloride plant.

The Health and Safety Executive investigated the incident. It is the costs of that investigation which are in dispute. The learned judge heard argument on the question of costs. The learned judge considered the details of the costs claimed totalling £142,655.33. There was no dispute about the total legal costs in the sum of £42,295.96.

The Health and Safety Executive's costs were divided into four parts:

(i) inspectors costs and disbursement £31,928.74.

(ii) photographic costs, £2,011.10.

(iii) Health and Safety laboratory costs, £57,005. (iv) costs of model of the plant £9,364.53. The total was £100,359.37. Incidently, to the advantage of the plaintiff, an error in the calculations set out in that schedule has saved the appellant some £11,000.

The appellants disputed only the cost of the model and the Health and Safety laboratory costs.

The judge heard submissions on those points. It was not part of Mr. John Hand QC's submissions below, on behalf of the appellant, that there was no entitlement to any such costs as a matter of principle. It was argued on behalf of the prosecution that the serious incident at the appellant's plant required thorough investigation before the bringing of any charge could be considered. That extended to the circumstances giving rise to the fire, and the scientific investigation that followed.

Mr. Hand submitted that the question of costs had to be approached on what was fair and right in the circumstances. He submitted that it was unnecessary to have a model of the plant, unless it was to assist the jury in a contested trial. He challenged the £57,005 for laboratory tests, making the following points:

(i) the prosecution had not persisted in a number of points made in the case summary of December 1994. That was the result of investigative work done by the appellant.

(ii) no criticism was made of the appellant's electrical systems. The criticisms that were made earlier were wholly unfounded.

(iii) Mr. Hand complained that the Health and Safety Executive expert's conclusion, as to a flange having moved apart through corrosion, was not pursued and had not identified the right problem. Mr. Hand said that the appellant ought not to have to pay for that part of the laboratory testing.

No authorities were cited to the learned judge. In relation to costs he said this:

"In relation to costs, I am asked to say that all the expenses claimed in the schedule which I have looked at with great care ought not to be paid by the defence. But the answer to that seems to me to be a simple and a straightforward one. It is this: if this kind of incident occurs, it has to be properly and carefully investigated. No stone must be left unturned in the investigation of a case of this nature. And, if that costs £142,655.33 pence, well, sobeit. I do not see why the taxpayer should pick up that particular bill. Accordingly, I am going to order that the entire sum I have mentioned, which are the prosecution costs in this matter, be paid by the defendant company."

The appellant's grounds of appeal state that it was wrong in principle or manifestly excessive to order the appellant to pay the entire Health and Safety Executive's costs of investigation and preparation in the sum of £100,359.37, because by doing so, the learned judge failed properly to exercise his discretion by not considering what costs were justly and reasonably to be paid by the appellant, pursuant to s.18 of the Prosecution of Offences Act 1985.

Mr. Hand makes three submissions to this Court: (i) that the appellant ought to pay the costs of any court appearances after it had been charged, including the costs of assembling the evidential material for presentation to the court at such hearings, but the appellant ought not to have to pay the costs of creating that evidential material. Thus, according to Mr. Hand's submission, the prosecution's costs of investigation prior to preparing the evidence for presentation at trial are not recoverable.

(ii) that, if the appellant is liable to pay investigation costs, then such costs should be limited to the costs relating to the allegations as presented to the court and not to allegations made earlier which had since been abandoned or not pursued.

(iii) that the court in exercising its discretion as to what was "just and reasonable" was bound to look critically at the extent of the investigations and the necessity for some of the expenditure in preparing the case. One example of such expenditure was the model of the plant, the cost of which bore no relationship to the assistance derived from it by the court.

The power to award costs is contained in s.18(1) of the Prosecution of Offences Act 1985 which reads so far as relevant to this appeal, as follows:

"Where

...

...

(c) any person is convicted of an offence before the Crown Court;

the court may make such order as to costs to be paid by the accused to the prosecutor as it considers just and reasonable."

A very similar provision, in s.2(2) of the Costs in Criminal Cases Act 1973, was considered in Neville v. Gardner Merchant Ltd (1983) 5 Cr.App.R. (S.) 349, (Divisional Court Kerr L.J. and Webster J.). The relevant part of s.2(2) reads:

"On the summary trial of an information, a magistrates' court shall on conviction have power to make such orders as to costs to be paid by the accused to the prosecutor as it thinks just and reasonable."

That was a case in which the defendant had pleaded guilty to a number offences under the Food Hygiene Regulations 1970. The magistrates' ordered the defendant to pay the costs of the prosecutor, including preparatory work carried out by the prosecutor's senior legal officer, but disallowed any amount in respect of time spent by the prosecutor's environmental health officer, who carried out the inspection which led to the proceedings. It was held that, pursuant to s.2(2), the amount ordered to be paid may include an amount in respect of the time of the officer or person who investigated the alleged offence, notwithstanding that the officer was a salaried official of the prosecuting body. Kerr L.J. said at p.352 (referring to the magistrates):

"Not only did they have a discretion to award these costs but prima facie costs of this kind should be awarded."

Kerr L.J. mentioned the case of R v. Maher (1983) 5 Cr.App.R.(S.) 39 and said at p. 353:

"This arose out of a different and more restricted provision than s.2(2) of the Costs in Criminal Cases Act 1973..."

Kerr L.J. concluded, at p.353, saying this:

"If they [referring to the magistrates] find... that all the time and trouble of the investigating officer had been due to the offences committed by this respondent, then it would be right to award the whole of these costs."

Maher was concerned with the provisions of s.4(1) of the same Act which reads:

"Where a person is prosecuted or tried on indictment before the Crown Court the court may-

(a) if the accused is convicted, order him to pay the whole or any part of the costs incurred in or about the prosecution and conviction, including any proceedings before the examining justices."

We may interpolate that s.4(1) of the 1973 Act has been replaced by s.18(1) of the 1985 Act, so as to give the Crown Court the same power to award costs as s.2(2) of the 1973 Act gave to magistrates' court. The power to award costs in all criminal courts is now the same, as set out in s.18 of the 1985 Act.

In Maher, another division of this Court held that an order for a convicted person to pay the costs of the prosecution under s.4(1) of the 1973 Act may relate only to those items of expenditure which might be the subject of an order for the payment of the costs of the prosecution out of central funds under s.3(3) of the 1973 Act. It was limited to costs incurred by the prosecutor and not to costs falling on public funds generally. Such items as jury expenses and overtime payments to, and travelling expenses of, officers engaged in the investigation, were disallowed.

Mr. Hugh Carlisle QC, on behalf of the prosecution, the respondent to this appeal, submitted that the decision in Neville v. Gardner Merchant had been regarded as settled law by prosecutors who daily recovered the costs of investigations leading to criminal prosecutions in appropriate cases.

Mr. Hand had, in the course of preparing for this appeal, discovered the case of R v. Seymour (1988) 9 Cr.App.R.(S.) 395, which was referred to in neither Archbold nor Blackstone. Seymour contained comments which were inconsistent with Neville v. Gardner Merchant . Mr. Carlisle submitted that if those comments were to be regarded as good law, then Seymour would have immediate and far-reaching implications. He submitted that Neville v. Gardner Merchant was correctly decided. Mr. Hand submitted the approach in Seymour was to be preferred.

In Seymour the defendant was fined for damaging a scheduled monument by ploughing certain of his fields to a depth which resulted in the destruction of an unknown quantity of Roman remains. The defendant had received £127,000 in compensation, following the making of a preservation order which cancelled the existing planning consent for development of the land. The Crown Prosecution Service conducted the prosecution. As part of its costs it was awarded £3,674.22, being the costs of English Heritage in investigating the matter. Stocker L.J., in giving the judgment of the Court, said at page 401:

"We have been referred to the case of Maher... That case was decided under the former Act- the Costs in Criminal Cases [Act] 1973. At the time this hearing took place the relevant Act was the Prosecution of Offences Act 1985, so that it does not follow that the views expressed by the court in the case of Maher necessarily apply to costs incurred under different legislation. However, we are minded to accept that the principle is probably the same."

The learned Lord Justice then set out s.18(1)(c) of that Act and continued:

"In our view not only the case of Maher but, it would seem to us, the reality and common sense of the situation, indicate that costs should be confined to the 'costs of the prosecution' itself and not to costs of investigations leading up to the prosecution, particularly where the body carrying out those investigations is not the same body as either the police or the Crown Prosecution Service."

The difficulty about Seymour is that the wording of s.4(1) of the 1973 Act is quite different from the wording of s.18(1) of the 1985 Act. Mr. Carlisle submitted that the comments on costs in Seymour were plainly made per incuriam because (i) Neville v. Gardner Merchant was not cited to the court; (ii) they failed to take into account the difference in the provisions of the 1985 Act. These dealt not with "the costs incurred in or about the prosecution" as in s.4 of the 1973 Act (see Maher) but generally, as in ss.2 and 3 of the 1973 Act which are similar to s.18(1) of the 1985 Act. Prior to the 1985 Act there was provision for the Health and Safety Executive, for example, to recover costs from central funds, whereas there was now no such provision and unless the Health and Safety Executive recovered from the appellant, they would recover from no one; (iii) in Seymour the investigation was carried out not by the prosecutor, the CPS, but by English Heritage. Here, the prosecutor was indeed the Health and Safety Executive acting through an inspector and instructed lawyers; (iv) in any event, the language used in Seymour, "minded to accept" and "probably the same" was indicative not of a definitive ruling but of a comment which was not necessary for the actual decision and was therefore not part of the ratio decidendi , since the court was anyway intending, as a matter of discretion, to reduce the amount of costs awarded, which it went on to do.

Mr. Hand submitted that although Maher concerned the differently worded s. 4(1) of 1973 Act, the Court in Seymour were correct to regard the principle in respect of s.18 of the 1985 Act as being the same. The court was correct, in other words, to place some constraint on the scope of what is "just and reasonable". In the absence of the possibility of the sort of detailed scrutiny which taxation might allow, it achieved a sensible balance between the parties to make the appellant liable only for the costs of preparing the evidence which had resulted from the investigation, for presentation at trial.

In our judgment, the submissions of Mr. Carlisle are plainly correct. In so far as Seymour and Neville v. Gardner Merchant conflict, we prefer Neville v. Gardner Merchant . We say that for the reasons given by Mr. Carlisle. It is our conclusion that Seymour was, indeed, decided per incuriam , Neville v. Gardner Merchant not being cited to the Court. Thus, we hold that the costs of the prosecution, for the purposes of s.18(1) of the 1985 Act, may include the costs of the prosecuting authority in carrying out investigations with a view to the prosecution of a defendant where a prosecution results and the defendant is convicted.

Mr. Hand submitted that the case of R v. Burt ex parte Presburg [196o] 1 QB 625 supported his argument that Maher was right in concluding that there was no difference in principle between the provisions of the then equivalent of s.18(1) of the 1985 Act and s.4(1) of the 1973 Act. We need say no more about that case than that it was not concerned with the costs of investigations leading to a prosecution but solely with the cost to the prosecution of a police officer attending court to give evidence.

We then turn to Mr. Hand's second submission. Mr. Carlisle's answer to this submission is that the learned judge was entitled to hold that the serious incident at the appellant's plant required a proper and careful investigation. The evidence obtained assisted the prosecution properly to review the appellant's expert evidence and to consider the pleas tendered. The fact that the prosecution eventually decided to modify its case after discussion with the appellant was not itself reason for denying or reducing costs which on any view were incurred. On the contrary, as Mr. Carlisle submitted, the compromise reached saved both court time and the costs of a contested hearing. Mr. Carlisle submitted that such a conclusion was in the public interest and it was just and reasonable to order the whole of the Health and Safety Executive's costs to be paid since they all arose out of the incident for which the appellant was responsible. We agree with Mr. Carlisle's submissions. The Health and Safety Executive's costs were incurred directly arising out of the incident which had to be investigated thoroughly and with care. The appellant had completely failed to show that part of the investigation should not have been carried out or that the Health and Safety Executive's costs were manifestly excessive. We heard detailed argument as to the particular ways in which the prosecution modified its case. We agree with Mr. Carlisle's submissions that the prosecution, far from abandoning its original case, was content to present the case in ways that were, as a matter of detail, different from the original case summary, in order to save the very great cost of resolving outstanding issues in a contested trial. That gave the appellant no proper basis for saying that the whole or any part of the investigation costs should be disallowed.

As to the model, acceptable pleas were not offered until 10 days before the hearing, by which time the model would anyway have had to be made. The model might well have assisted a jury, which was the expected form of trial in this case if acceptable pleas had not been forthcoming.

What the learned judge did was correctly to apply the law in accordance with Neville v. Gardner Merchant . We do not see that he fell into error.

We would not wish to leave this case without making the following observations:

(i) the prosecution should serve upon the defence, at the earliest time, full details of its costs, so as to give the defence a proper opportunity to consider them and to make representations upon them, if appropriate. Although the respondent's schedule in this case was served only a few days before the hearing, Mr. Hand did not complain about that, nor did he seek an adjournment or intimate that he had any difficulty in dealing fully with the issue of costs. After all, the appellant, with all the expertise at its disposal, was in the best position to assess what a proper investigation would cost.

(ii) if a defendant, once he has been served with a schedule of the prosecution's costs wishes to dispute the whole or any part of the schedule he should, if possible, give proper notice to the prosecution of the objections proposed to be made or, at least, make it plain to the court precisely what those objections are.

It may be, in the exceptional case, that a full hearing for the objections to be resolved would need to be held. There is no provision for taxation of the prosecution's costs in a criminal case. No doubt taxation of such costs would be a more satisfactory way of resolving disputes where they arise. As it is, such disputes fall to be resolved in cases such as the present by applying the principles in Neville v. Gardner Merchant .

We are not to be taken as criticising counsel in this case. We are not, but the plain fact is that the learned judge was presented with a limited area of objection to the prosecution's schedule of costs. It is clear that the learned judge did consider the objections made. We have no doubt that he was entitled to reject them because they completely failed to show that all or any part of the time and trouble of the Health and Safety Executive's investigating team had not been due to the offences committed by the appellant.

For those reasons, this appeal must fail and is dismissed.