Costs Denied | Voluntary Bill Applications Fall Under The Criminal Costs Regime

This case concerned an application for costs following the dismissal of an earlier application made by IPE Marble Arch Limited (“the prosecution”) for leave to prefer a voluntary bill of indictment against Anthony Moran (“the defendant”). The substantive proceedings had concluded on 7 June 2024 when Mrs Justice Yip DBE refused the prosecution’s application, finding it lacked legal foundation ([2024] EWHC 1375). Subsequently, the primary dispute revolved around whether Mr Moran was entitled to recover his legal costs from the prosecution in relation to the failed application.

Mr Moran sought an order under Section 51 of the Senior Courts Act 1981, arguing that his legal costs should be awarded on an indemnity basis. He contended that the application for a voluntary bill was inappropriate and lacked merit, asserting that the prosecution knew or ought to have known that the application was destined to fail. The prosecution disputed the court’s jurisdiction to intervene in costs matters under the civil costs regime, contending that the application, being rooted in criminal proceedings, should be governed by the statutory regime for criminal costs set out in the Prosecution of Offences Act 1985.

The central issue then emerged: whether the costs of the voluntary bill proceedings initiated in the High Court should fall under the civil costs regime (governed by the Civil Procedure Rules) or the criminal costs regime set out in the Prosecution of Offences Act 1985. Under the criminal costs regime, there was no provision enabling an order for costs to be made against IPE Marble Arch. Accordingly, the prosecution submitted that no costs order could be made.

The prosecution was not represented at the costs hearing, which took place on 24 October 2024. Notice had been provided that its solicitors had ceased to act, and Ms Nisha Maher, Head of HR and Operations at the company, attended to observe and present the company’s position. She confirmed reliance on the written submissions previously provided by the company’s former solicitors.

During the hearing, Mr Moran, represented by counsel, argued that the Civil Procedure Rules should govern costs in the High Court, as they applied to all proceedings unless explicitly excluded. Referring to prior case law, particularly Evans v Serious Fraud Office [2015] EWHC 263 (QB), the defendant submitted that voluntary bill proceedings were sufficiently exceptional to warrant a costs order under the civil regime.

Conversely, the prosecution asserted that the matter was primarily criminal in nature, governed by the Prosecution of Offences Act 1985, which precluded the High Court from awarding Mr Moran’s costs in this context. They argued that, irrespective of how the proceedings were initiated, their intrinsic criminal nature meant that the civil costs regime should not apply.

Given the position of both parties, the court was tasked with determining first whether it had jurisdiction to make a costs order under the civil regime or if voluntary bill proceedings fell within the statutory criminal costs framework. Additionally, if the court concluded it had jurisdiction under the civil regime, it would need to decide whether costs should be awarded on the standard or indemnity basis.

 Chronology of Relevant Events:

• 7 June 2024: Mrs Justice Yip dismissed IPE Marble Arch Limited’s application for leave to prefer a voluntary bill of indictment ([2024] EWHC 1375).
• 24 October 2024: Costs hearing before Mrs Justice Yip.
  •     The prosecution was unrepresented at this hearing, while Mr Moran was represented by counsel.
  •     Ms Nisha Maher attended on behalf of the prosecution and confirmed reliance on written submissions.
• 15 November 2024: Judgment on costs delivered by Mrs Justice Yip.

The principal issues for determination related to:

• The Court’s Jurisdiction to Award Costs: Whether the High Court had the authority to make an order for costs in voluntary bill proceedings, specifically under Section 51 of the Senior Courts Act 1981, despite the criminal nature of the underlying proceedings.
• Appropriate Costs Regime: If the court had jurisdiction under Section 51, whether the civil costs regime (specifically, the Civil Procedure Rules) applied to voluntary bill proceedings or whether the statutory limits under the Prosecution of Offences Act 1985 precluded the award of costs
• Standard vs Indemnity Basis: If a costs order was deemed appropriate, whether the order should be made on the standard basis or the indemnity basis (as Mr Moran sought), taking into account the conduct of the prosecution when making the application.

Parties’ Positions and Arguments:

Mr Moran (Defendant):

• Jurisdiction: Mr Moran argued that the High Court had jurisdiction to award costs under Section 51 of the Senior Courts Act 1981. He contended that Section 51 applied to all proceedings unless specifically excluded, and voluntary bill proceedings qualified as “proceedings” within the High Court’s discretion over costs.
• Civil Costs Regime: He maintained that the Civil Procedure Rules governed costs even in situations where the underlying matter related to a criminal case, citing Evans v Serious Fraud Office as authority for this proposition. According to Mr Moran, the same principles should apply here, making the civil costs regime applicable.
• Indemnity Costs: Mr Moran argued that the prosecution’s application for the voluntary bill had been wholly without merit, claiming it was doomed to fail. On this basis, he sought indemnity costs, asserting that the prosecution’s conduct in pursuing the application, despite its futility, amounted to unreasonable behaviour that warranted departing from the standard basis of costs.

IPE Marble Arch Ltd (Prosecution):

• Jurisdiction: The prosecution disputed that the High Court had any jurisdiction to award costs under the Senior Courts Act 1981 for a matter which was criminal in nature. They argued that the court’s jurisdiction in costs matters was limited by the Prosecution of Offences Act 1985, which governed applications related to criminal proceedings.
• Criminal Costs Regime: They contended that because the application to prefer a voluntary bill was a criminal matter, it fell under the statutory criminal costs regime. The prosecution emphasised that the Prosecution of Offences Act 1985 did not afford the High Court (other than its Divisional Court) the authority to make any costs orders in such proceedings.
• Standard Costs at Most: Even if the court found it had jurisdiction to make a costs order, the prosecution submitted that any order should be limited to costs on the standard basis, rejecting the notion that their conduct warranted indemnity costs.

In summary, the case boiled down to whether the High Court could legitimately award costs for proceedings linked to a criminal matter and, if so, on what basis those costs might be assessed.

Decisions and Findings:  

The judge determined that the application for a voluntary bill of indictment, although a separate High Court process related to the commencement of criminal proceedings, remained a “criminal cause” for the purposes of awarding costs. Since voluntary bill applications could lead to criminal trials and punishment, they fall within the definition of “criminal cause” under section 51(5) of the Senior Courts Act 1981.

“Although Mr Krolick sought to argue that the voluntary bill procedure does not itself directly put a respondent in jeopardy, this is exactly what it does. Had I granted the application, an indictment would have been laid before the Crown Court and Mr Moran could have expected to stand trial. That it was possible to identify ‘the defendant’ and ‘the prosecutor’ is plain from my substantive judgment. The voluntary bill application therefore plainly fell within the Amand definition of a criminal cause or matter. The application was made following the procedure prescribed in the Criminal Procedure Rules. I conclude that the proceeding itself was criminal in nature and comes within the definition of a criminal cause for the purpose of section 51(5).” 

He further ruled that costs in “criminal causes” are subject to the criminal costs regime, not the civil regime

“Section 51(1) is not to be taken as altering the practice in relation to criminal proceedings. The question then is whether voluntary bill applications to the High Court are to be treated as ‘criminal proceedings’. … The authorities confirm that, save in exceptional cases, costs in criminal proceedings will be considered within the statutory framework for criminal cases.” 

There were no exceptional circumstances to justify applying the civil costs regime under the Murphy exception. The fact that the voluntary bill process was used, or that the prosecution was purportedly motivated by private interests, did not justify a departure from the established statutory criminal costs regime.

“Further, Mr Krolick’s reliance on the absence of any power for the High Court to make a criminal costs order, meaning that if the High Court does not use its civil costs powers, a defendant in Mr Moran’s position will be left without access to costs does not assist. This argument has been considered and rejected in other cases.”

The judge rejected the precedent set in Evans v SFO as establishing a different costs practice. He found that although Evans v SFO involved awarding civil costs in voluntary bill proceedings, that case was not a binding precedent for the application of the civil costs regime here. The findings in Evans were based on a concession from the prosecuting authority without argument, and therefore, could not be relied upon as an established practice for voluntary bill applications.  

“I have explained why Evans v SFO is not a precedent to be followed. The fact that an order was made on the basis of a concession cannot be treated as an established practice allowing for a distinction to be drawn between High Court proceedings brought through this process compared to other processes. In general terms, criminal proceedings, however they originate, are subject to the criminal costs regime.”

The judge specifically rejected the argument that the voluntary bill process warranted a categorisation distinct from other criminal-related proceedings before the High Court, such as judicial reviews or appeals by case stated. Both procedures follow criminal causes, and for costs purposes, they must fall within the same framework unless exceptional circumstances arise.

“I cannot see any principled basis to draw a distinction between voluntary bill proceedings and other ways in which proceedings relating to criminal causes may be brought before the High Court. The arguments advanced on Mr Moran’s behalf about the procedure being an old one and being judge-made and about the unfairness of being left without access to costs apply also to other types of proceedings where the courts have found that the civil costs regime does not apply.”

Finally, the judge concluded that he could not award Mr Moran his costs given that none of the specific exceptions to the statutory criminal costs regime applied. No inherent discretionary power could be found, and as such, the application for costs had to be refused.

“I conclude that this matter was a criminal cause. Absent any exceptional circumstances falling with the very narrow category established by Murphy and subsequent decisions, costs in relation to criminal proceedings are recoverable only to the extent permissible by the statutory criminal costs regime. These proceedings do not fall within the Murphy exception. There is no power to make the order sought under the criminal regime. No other residual inherent power has been identified. It follows that I am constrained to refuse the application for costs.”