No rule to stop costs being awarded against children, says judge

Morgan: Litigation friends can be liable for costs

There is no general rule preventing costs being awarded against children, a High Court judge has said.

Mr Justice Morgan said the case law on the issue did not present a “clear or coherent picture” on the issue, and contained examples of costs being made against both child claimants and defendants, even where they had litigation friends.

“I therefore conclude that there is no general rule that the court will not make an order for costs against a child unless they have been guilty of fraud or gross misconduct.

“Instead, as always, the general rule is that the court must consider all of the circumstances of the case.”

Morgan J was ruling in a case involving former law firm Baxendale-Walker, whose founder Paul Baxendale-Walker was struck off in 2007, and later fined for impersonating an official from HMRC in dealings with the Solicitors Regulation Authority.

The Court of Appeal ruled in 2017 that Baxendale-Walker should have warned management consultant Iain Barker of the significant risk that a tax avoidance scheme would not withstand a challenge from HMRC. Mr Barker later paid the HMRC £11.3m in a settlement.

Delivering judgment in Barker v Confiance and others [2019] EWHC 1401 (Ch), Morgan J said the case before him involved “various applications” relating to the costs of an unsuccessful application made by two of Mr Barker’s children, Tom and Freya, acting by their mother, Susan Mary Glover, as litigation friend.

The judge said Tom and Freya applied in 2017 for a number of orders, which would have revoked or varied an earlier court order made in July 2014, approving a settlement of a trust dispute involving Mr Barker and his five children. Morgan J said he dismissed that application in November 2018.

On litigation friends, Morgan J said that Halsbury’s Laws, Vol 10 paragraph 1420 contained the statement: “A litigation friend is not liable to pay the costs of an unsuccessful defence unless he has been guilty of gross misconduct.”

However, he said there was “really only one case” which provided “any support” for this.

Morgan J went on: “Further, the many cases I referred to earlier which described the position of a litigation friend effectively treated the litigation friend as the relevant person (rather than the protected party) when the court considered the question of costs.

“The reasoning in those cases can readily be applied whether the litigation friend acts for a claimant or for a defendant. Yet further, under the rules of the CPR in relation to costs, although one has regard to all the circumstances of the case, claimants and defendants are generally treated in the same way.”

Morgan J concluded on the liability of litigation friends: “When considering whether to make an order for costs against a litigation friend, who has acted for an unsuccessful child party, the court should apply the general approach that, as regards costs, the litigation friend is expected to be liable for such costs as the relevant party (if they had been an adult) would normally be required to pay.

“The governing rule is that the court has regard to all the circumstances of the case and it is open to the litigation friend to point to any circumstance as to their involvement in the litigation which might justify making a different order for costs from that which would normally be made against an adult party.”

Referring again to Halsbury’s Laws, Vol 10, this time to paragraphs 1418 and 1420, Morgan J said this stated that child claimants were not normally liable for costs in the absence of fraud.

The judge rejected this approach, but said he was “not given any evidence as to Tom and Freya’s awareness of, and views” on the litigation and “do not even know if they are aware that the court is now being asked to make orders for costs against them”.

He concluded: “On the material before me, it seems likely that the application of 27 June 2017 was brought by Ms Glover of her own initiative in circumstances where Tom and Freya had no ability to control or influence the course of that application.

“Tom and Freya have gained nothing from the application. Accordingly, I will not make orders for costs against Tom and Freya personally.”

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