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Who picks up the tab? Costs in Licensing Appeals

Recent reports have suggested that the case of R (on the application of NEWHAM LONDON BOROUGH COUNCIL) (Claimant) v STRATFORD MAGISTRATES' COURT (Defendant) & MEHMET SARON (Interested Party) (2012) redefined the position as to costs and provides a shield to Licensing Authorities to act with immunity to the consequences of their actions.

Although the facts are different from the case of BRADFORD CITY METROPOLITAN DISTRICT COUNCIL v ERIC WILSON BOOTH (2000) the case serves primarily, from a costs point of view, to reaffirm the now established position as to costs as set out in the Bradford case.

The powers of the Magistrates' Court to award costs are governed by the Licensing Act 2003 (s.181(2)) which empowers the Magistrates to make such order as it sees fit; however the power is not unfettered and must be exercised in a principled manner.

What constitutes a principled manner was described quintessentially by Lord Bingham in the Bradford Case and was reaffirmed in the recent decision concerning Stratford Magistrates.

“Where a complainant has successfully challenged before justices an administrative decision made by a police or regulatory authority acting honestly, reasonably, properly and on grounds that reasonably appeared to be sound, in exercise of its public duty, the court should consider, in addition to any other relevant fact or circumstances, both (i) the financial prejudice to the particular complainant in the particular circumstances if an order for costs is not made in his favour; and (ii) the need to encourage public authorities to make and stand by honest, reasonable and apparently sound administrative decisions made in the public interest without fear of exposure to undue financial prejudice if the decision is successfully challenged.”

Unlike the normal rule in civil litigation, costs do not necessarily follow the cause, i.e. the loser does not always pay the winner’s costs.  In Licensing Appeals the winners and losers are not always apparent!

The prejudice against the lay Appellant must be weighed against the behaviour of the Licensing Authority and the need to “encourage decisions made in the public interest without fear of exposure to undue financial prejudice if the decision is successfully challenged”. 

There is a growing number of cases however where the Administrative Courts are highlighting “unreasonable” behaviour of the Licensing Committees in how they reach and explain their decisions.  It is in this area that the most interesting developments are arising.

If you would like to discuss any of the issues surrounding this article please call to speak to one of our solicitors.