by Mark Henderson and Rowena Moffatt of Doughty Street Chambers
and Alison Pickup and Monika Nollet of Asylum Aid
~ Revised 2023 Edition ~
Introduction: Costs in the First-tier Tribunal
The test for an order for costs under rule 9
Procedure for applying for costs
Nationality and Borders Act 2022: new power to charge parties
42.1 Under rule 9 of the 2014 Procedure Rules, the First-tier Tribunal has the power to make a costs award only in the following circumstances -
"9.—(1) If the Tribunal allows an appeal, it may order a respondent to pay by way of costs to the appellant an amount no greater than—
(a) any fee paid under the Fees Order that has not been refunded; and
(b) any fee which the appellant is or may be liable to pay under that Order.
(2) The Tribunal may otherwise make an order in respect of costs only—
(a) under section 29(4) of the 2007 Act (wasted costs) and costs incurred in applying for such costs; or
(b) if a person has acted unreasonably in bringing, defending or conducting proceedings.
(3) The Tribunal may make an order under this rule on an application or on its own initiative.
(4) A person making an application for an order for costs—
(a) must, unless the application is made orally at a hearing, send or deliver an application to the Tribunal and to the person against whom the order is sought to be made; and
(b) may send or deliver together with the application a schedule of the costs claimed in sufficient detail to allow summary assessment of such costs by the Tribunal.
(5) An application for an order for costs may be made at any time during the proceedings but must be made within 28 days after the date on which the Tribunal sends—
(a) a notice of decision recording the decision which disposes of the proceedings; or
(b) notice that a withdrawal has taken effect under rule 17 (withdrawal).
(6) The Tribunal may not make an order for costs against a person (in this rule called the "paying person") without first giving that person an opportunity to make representations.
(7) The amount of costs to be paid under an order under this rule may be determined by—
(a) summary assessment by the Tribunal;
(b) agreement of a specified sum by the paying person and the person entitled to receive the costs (in this rule called the "receiving person");
(c) detailed assessment of the whole or a specified part of the costs (including the costs of the assessment) incurred by the receiving person, if not agreed."
42.2 If your appeal has been allowed, you will always seek rule 9(1) costs, but these are limited to a refund of any fee that has been paid to the Tribunal. You should always consider applying for rule 9(2) costs if you have proper grounds to do so. The distinction between rule 9(2)(a) and (b) is that rule 9(2)(a) applies the conventional jurisdiction to make 'wasted costs orders' against legal representatives, while rule 9(2)(b) applies where a party has acted unreasonably in bringing, defending or conducting the appeal. Although the Tribunal held in Awuah and Others (Wasted Costs Orders – HOPOs – Tribunal Powers)  UKFTT 555 (IAC) (unreported) that HOPOs are not to be treated as legal representatives of the Secretary of State (and so cannot be the subject of rule 9(2)(a) orders), their conduct in defending the appeal (including a failure to concede an obviously meritorious appeal in a timely way) could be the basis of a rule 9(2)(b) application.
'Unreasonable' also means what it has been understood to mean in this context for at least half a century. The expression aptly describes conduct which is vexatious, designed to harass the other side rather than advance the resolution of the case, and it makes no difference that the conduct is the product of excessive zeal and not improper motive. But conduct cannot be described as unreasonable simply because it leads in the event to an unsuccessful result or because other more cautious legal representatives would have acted differently. The acid test is whether the conduct permits of a reasonable explanation. If so, the course adopted may be regarded as optimistic and as reflecting on a practitioner's judgment, but it is not unreasonable." (Emphasis added)
42.4 The same 'basic test' is adopted under Rule 9(2)(b). The Tribunal has formulated the question as 'whether there is a reasonable explanation for the conduct under scrutiny': Cancino  UKFTT 00059 (IAC). The conduct in question may relate to the Home Office's actions or inactions during any point (or all) of the appeal from its commencement to its final determination in the First-tier Tribunal. Note, however, that 'unreasonable' does not mean 'wrong' and save in so far as a defence is objectively assessed to be obviously meritless, unreasonable conduct will be more likely to be found in the way in which an appeal is pursued than in the merits of the Home Office's position: Presidential Guidance Note No 2 of 2018.
• Whether the Home Office has ignored (in the original decision and/or any review) significant evidence you have submitted.
• Whether the decision (and any review) is clearly and obviously wrong either as a matter of law, because, for example, it applies the wrong country guidance case or outdated case law, or is factually incorrect (eg it clearly misstates your client's evidence).
• Whether the HOPO acted unreasonably, for example by advancing submissions that are incorrect in law or fact, or by failing to concede a clear-cut case.
• Failure to conduct a meaningful review of the appeal (if one is required by directions, as will be the case in appeals started on or after 22 June 2020).
• Other failures to comply with directions which, for example, have led to unreasonable last-minute concessions or withdrawals, or adjournments which would not otherwise have been required. Helpfully, the Practice Direction provides at paragraph 5.4 that "Where a hearing is adjourned because of the introduction of late evidence the Tribunal will consider whether to exercise its costs powers."
42.6 Further guidance is provided in Presidential Guidance Note No 2 of 2018, issued after the decision in Awuah and Others (Wasted Costs Orders – HOPOs – Tribunal Powers)  UKFTT 555 (IAC), to which you should refer. This includes the following helpful summary of the applicable principles which the Tribunal should apply when deciding whether to make a rule 9(2)(b) order:
(i) The conduct under scrutiny is to be adjudged objectively and the Tribunal is the arbiter of unreasonableness.
(ii) The fundamental enquiry is whether there is a reasonable explanation for the conduct under scrutiny.
(iii) Unreasonable conduct includes that which is vexatious, designed to harass the other party rather than advance the defence and ultimate outcome of the proceedings.
(iv) While the test of unreasonableness is objective, its application will not be divorced from the circumstances of the individual case and those of the person or party in question.
(v) The objective standard to be applied to the Secretary of State's case workers, HOPOs and others is that of the hypothetical reasonably competent civil servant.
(vi) Thus it will be appropriate to presume – a rebuttable presumption – that HOPOs are properly qualified and sufficiently trained so as to adequately discharge the important function of representing a high-profile Government Minister in the self-evidently important sphere of immigration and asylum legal proceedings in a society governed by the rule of law.
(vii) The measurement of this standard in the individual case will take into account all that is recorded in  of our principal judgment (Awuah and Others).
(viii) In every case the Secretary of State must undertake an initial assessment of the viability of defending an appeal within a reasonable time following its lodgement. Where this does not result in a concession or withdrawal or something comparable, this duty, which is of a continuing nature, must be discharged afresh subsequently. (see our elaboration at  –  infra).
(ix) It will, as a strong general rule, be unreasonable to defend – or continue to defend – an appeal which is, objectively assessed, irresistible or obviously meritorious.
42.7 The Guidance Note goes on to suggest that in most cases, the Home Office will be expected to conduct an initial assessment of whether to pursue the appeal within 6 weeks of the appeal being lodged (see 2.11). Although this guidance pre-dates the introduction of the reform procedure with the Home Office review stage, it is a helpful yardstick for when rule 9(2)(b) costs might be awarded if the Home Office fails to concede an appeal at an early stage.
42.8 Costs applications can be made at any time during the proceedings but must be made within 28 days after the Tribunal sends the notice of decision which disposes of the proceedings, or a notice that withdrawal has taken effect under rule 17: rule 9(5). The precise time at which you make your application will depend on the specifics of your case. If you seek to make submissions in writing (as will often be the case), it is likely be appropriate to wait until you receive the Tribunal's determination before making the costs application. It may be that parts of the determination will assist your submissions on costs, for example, if the Tribunal has criticised the Home Office's conduct or acknowledged the overwhelming merits of the appeal.
42.9 Your detailed submissions on costs should be accompanied by a chronology of key events relevant to the issue of costs and a schedule of costs, including counsel's fees and disbursements, if applicable. In Awuah and Others (Wasted Costs Orders – HOPOs – Tribunal Powers)  UKFTT 555 (IAC) at para 47, the Tribunal emphasised that the submissions and evidence need to make clear what costs are said to have been caused by the Respondent's unreasonable conduct (see also the Tribunal's 2018 Guidance on costs).
42.10 Use the Solicitor's guideline hourly rates for calculating your costs by fee earner grade (A – solicitors and legal executives with over 8 years' experience, B – solicitors and legal executives with over 4 year' experience, C – other solicitors or legal executives and fee earners with equivalent experience, and D – trainee solicitors, paralegals and other fee earners) and part of the country (London 1, 2 and 3, and National 1 and 2). You should file your application for costs at the hearing centre at which the appeal was heard and serve a copy on the relevant POU, copying in firstname.lastname@example.org.
42.11 On receipt of your costs application, the Tribunal will issue directions, including a timeframe for the Home Office's written submissions in response to your application and your subsequent response to those submissions. It is possible that the issue of costs may be resolved between the parties without the need for the Tribunal's assessment and decision. However, if the parties cannot reach an agreement on costs, the Tribunal will proceed to listing the application for consideration and decision on papers. If parties wish to file evidence or make any further related written submissions, they must do so no later than 7 days before the hearing and at the same time serve a copy on the other party. Each hearing centre has a dedicated email address, notified to the parties at the point of listing, to enable them to communicate with the Tribunal in relation to the application. In online procedure appeals, the Tribunal's decision on costs is uploaded onto MyHMCTS and parties are notified by email that a decision has been made and can be viewed via the platform. In paper appeals, it is understood that the Tribunal's decision on costs is communicated by email or post.
42.12 If you are successful on your costs application, reasonable costs are payable on the standard basis: Willow Court Management v Alexander  UKUT 290 (LC). An application may be made for costs on the indemnity basis where the conduct is 'unreasonable to a high degree': Presidential Guidance Note No 2 of 2018. In legally aided cases, costs of both solicitor and counsel can be recovered at inter-partes rates, using the Guideline Hourly rates above (you are not limited to legal aid rates). If your client has paid privately, the indemnity principle means you will only be able to recover the amounts actually paid (or due) by your client. If you are acting pro bono, consider applying for a pro bono costs order (which will normally be paid to the Access to Justice Foundation). Where costs are not agreed, they will normally be subject to summary (rather than detailed) assessment.
42.13 The Nationality and Borders Act 2022, section 80, will (when brought into force) introduce a new section 25A into the Tribunals, Courts and Enforcement Act 2007, which gives the First-tier Tribunal and Upper Tribunal the power to charge parties for wasting the tribunal's resources. Any money recovered under this power will be paid into central funds rather than going to either party. Section 25A will provide -
"25A First-tier Tribunal and Upper Tribunal: charging power in respect of wasted resources
(1) If, in respect of proceedings before the First-tier Tribunal or Upper Tribunal, the Tribunal considers that –
(a) a relevant participant has acted improperly, unreasonably or negligently, and
(b) as a result, the Tribunal's resources have been wasted,
it may charge the participant an amount under this section.
(2) Subsection (1) is subject to Tribunal Procedure Rules.
(3) For the purposes of this section "relevant participant", in respect of proceedings, means –
(a) any person exercising a right of audience or right of conduct of proceedings on behalf of a party to proceedings,
(b) any employee of such a person, or
(c) where the Secretary of Sate is party to proceedings and has not instructed a person mentioned in paragraph (a) to act on their behalf in the proceedings, the Secretary of State.
(4) A person may be found to have acted improperly, unreasonably or negligently for the purposes of subsection (1) by reason of having failed to act in a particular way.
(5) The proceeds of amounts charged under this section must be paid into the Consolidated Fund."
42.14 Section 25A(3) covers the legal representatives of the parties, as well as the Secretary of State herself. The First-tier Tribunal's reported decision of Awuah and Others (Wasted Costs Orders – HOPOs – Tribunal Powers)  UKFTT 555 (IAC) made clear that the relationship between the Secretary of State and HOPOs is that "28. … the minister is the Secretary of State and the civil servants are the HOPOs employed by the Home Office, the organisation which gives effect to the Secretary of State's decisions and policies and is directly answerable to him." In essence, they are the same person.
42.15 Under the new section 25A(3), both parties' representatives, and the Secretary of State where she is not legally represented, are liable to a penalty for wasting the Tribunal's resources by acting "improperly, unreasonably or negligently". Whether and if so, how individual HOPOs could be affected by these provisions remains unclear.