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JUDICIAL REVIEW – INVESTIGATORY POWERS TRIBUNAL HAS POWER TO AWARD COSTS

In a landmark decision, the Investigatory Powers Tribunal (“the Tribunal”) has held that it does have power to award costs.

The Investigatory Powers Tribunal

When a claim is made to the Tribunal, the principles of judicial review are applied by the Tribunal in making determinations (Regulation of Investigatory Powers Act 2000 (“the 2000 Act”) sections 67(2) and 67(3)(c)). Although the originating application is by way of Tribunal Forms T1 and T2, the claim essentially follows the provisions in the Civil procedure Rules, Part 54 relating to judicial review claims.

The original Claim

The Claimants, owners of a number of substantial businesses predominantly involved in the FMCG sector and the hotel sector, had previously brought two successful judicial review claims against the Defendant, in relation to a production order obtained by the Defendant against the auditors of the Claimants’ businesses and in relation to a search warrant to search business premises owned by the Claimants’ holding company (see Chatwani & Others v National Crime Agency and Birmingham Magistrates’ Court [2015] EWHC 1284 (Admin); Chatwani & Others v National Crime Agency and Birmingham Crown Court [2015] EWHC 1283 (Admin)). During the course of those judicial review claims the Claimants discovered that the Defendant had placed covert listening and visual recording devices in their business premises. The Claimants sought an order quashing the authorisation for property interference to install the devices and the subsequent approval by a Surveillance Commissioner, Sir Scott Baker. The Claimants relied upon, inter alia, the decisions in Energy Financing Team Limited v The Director of the Serious Fraud Office [2005] EWHC 1626 (Admin), R (Rawlinson & Hunter Trustees) v Central Criminal Court [2012] EWHC 2254 (Admin) and R (Golfrate Property Management Limited) v Southwark Crown Court [2014] EWHC 840 (Admin). The Tribunal accepted that an applicant for authorisation and/or approval has a duty to include in it the necessary material to enable the decision maker to be satisfied that the statutory conditions are met and must also make full and accurate disclosure, including disclosure of anything that might militate against the grant.
The Tribunal held that neither the Director nor the Surveillance Commissioner had been given sufficient information, in particular an operational plan which revealed an ulterior purpose for the application to install recording devices. The Claims were allowed and the Tribunal made the Order applied for by the Claimants (see Chatwani & Others v National Crime Agency [2015] UKIPTrib 158488-CH).

Costs in the Tribunal

Subsequent problems arose in relation to the Defendant’s compliance that Order in particular provisions important to the Claimants regarding dissemination of recorded material to third parties. The Claimants incurred costs in attempting to get the Defendant to comply. Since its creation pursuant to the 2000 Act, the Tribunal has not awarded costs to any party to a claim before it. The issue of costs had been dealt with in cases previously, notably the cases of W v Public Authority (IPT/09/134) and Mr & Mrs B v Dept for Social Development (IPT/09/11/C).

In W v Public Authority a Claim had been made in October 2009. An inter partes hearing was fixed for 6 and 7 December 2010 and directions were made for the service of witness statements by the parties (such witnesses to attend for cross-examination) and written submissions to be served sequentially. The Defendant incurred costs in relation to preparation for that hearing in the sum of some £5,700. Subsequently the Claimant failed to serve any submissions and withdrew its Claim. The Defendant claimed its costs. Following an examination of the 2000 Act the Tribunal concluded that it did not have power to award costs. In Mr & Mrs B v Dept for Social Development, the Tribunal made a finding in favour of Mr and Mrs B that, on 23 May 2006, two officers of the Northern Ireland Social Security Agency’s Benefit Investigation Service, entered their house posing as potential house purchasers, and remained in the property for 35 minutes. The authorisation of this action did not in fact fall within the provisions of the 2000 Act and was unlawful. Mr and Mrs B’s application for costs was refused. The Defendant, which had incurred costs of £200,000 in defending the Claim, relied upon, inter alia, W v Public Authority.

Unlike judicial review claims in the high court where costs usually follow the event (and did in the Claimants earlier judicial review claims) the Tribunal has made a point of seeking to appear ‘costs neutral.’ Its website attempts not to discourage claims by those aggrieved by the actions of a public body and to reassure applicants that they would not face an award of costs. In relation to the power to award costs it states:

… if it exists at all, [it] would be exercised only in exceptional cases…”

Following breaches of the Tribunal’s Order the Claimants made an application for an unless order and for costs incurred by the Claimants in trying to obtain compliance with the Order. The Tribunal was invited to review its position on costs. It was submitted that the position under the 2000 Act permitted claims for costs incurred by parties to a complaint heard by the Tribunal, in particular Section 67 of the 2000 Act was drawn widely enough to make such an order:

“67.— Exercise of the Tribunal’s jurisdiction–
(7) Subject to any provision made by rules under section 69, the Tribunal on determining any proceedings, complaint or reference shall have power to make any such award of compensation or other order as they think fit…” (emphasis added).

The Tribunal Rules (statutory instrument 2000 No.2665) provided power to the Tribunal to determine its own procedure in considering claims, subject to certain rules in the legislation; again the terms of the Rules being wide enough to encompass an award of costs. In relation to the grounds required for a favourable award of costs the Claimants submitted that it must at least be possible to found a strand of exceptionality, if such a threshold was required, on improper behaviour or conduct by one of the parties to the litigation. In that regard the wasted costs jurisdiction was be analogous (see Civil Procedure Rules, Rule 46.8) and, in particular, the guidance issued on the making of such orders in Ridehalgh v Horsefield [1994] Ch. 205, CA. The Claimants submitted that, whether applying the guidance in Ridehalgh v Horsefield or a test of exceptionality, the facts of the case made it appropriate for the Tribunal to award the Claimants’ costs pursuant to Section 67(7). In finding in favour of the Claimants, the Tribunal found the breaches in relation to its Order to be “wholly exceptional” and awarded the Claimants costs in the sum of £10,000.

Having been persuaded that it does have power to award costs against a party it remains to be seen whether the Tribunal will extend this power to make further awards of costs in cases it hears. In the short term, it is thought not. However, a party to a decision of the Tribunal should take heed of this decision as failure to comply with an order may render that party liable for costs.

Bart Casella
30.9.15

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