1. Introduction
Solicitors need to inform clients in criminal cases about the changes to the Defendants' Costs Orders regime which are in effect for criminal proceedings commencing after 1 October 2012, following the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
1.1 Who should read this practice note?
All solicitors practising criminal law.
1.2 What is the issue?
Practitioners should be aware that in respect of criminal proceedings commenced on or after the 1 October 2012, the provisions of Schedule 7 to the Legal Aid, Sentencing and Punishment of Offenders Act 2012 will apply.
You should advise your clients about the practical effect of the changes to the law on Defendants' Cost Orders in the event that they are acquitted of an offence at trial or succeed in an appeal.
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1.3 Professional conduct
The following sections of the SRA Code are relevant to this issue:
Chapter 1 of the SRA Code 'Client Care' is concerned with client care, and it includes the following specific outcomes and indicative behaviours in relation to costs and costs information:
- O(1.13) clients receive the best possible information, both at the time of engagement and when appropriate as their matter progresses, about the likely overall cost of their matter
- IB(1.18) where you are acting for a publicly funded client, explaining how their publicly funded status affects the costs
- IB(11.1) providing sufficient time and information to enable the costs in any matter to be agreed
- IB(11.8) demanding anything for yourself or on behalf of your client, that is not legally recoverable, such as when you are instructed to collect a simple debt, demanding from the debtor the cost of the letter of claim since it cannot be said at that stage that such a cost is legally recoverable
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1.4 Status
Practice notes are issued by the Law Society for the use and benefit of its members. They represent the Law Society's view of good practice in a particular area. They are not intended to be the only standard of good practice that solicitors can follow. You are not required to follow them, but doing so will make it easier to account to oversight bodies for your actions.
Practice notes are not legal advice, nor do they necessarily provide a defence to complaints of misconduct or of inadequate professional service. While care has been taken to ensure that they are accurate, up to date and useful, the Law Society will not accept any legal liability in relation to them.
For queries or comments on this practice note, contact the Law Society's Practice Advice Service: www.lawsociety.org.uk/practiceadvice.
1.5 Terminology
Must - A specific requirement in legislation or of a principle, rule, outcome or other mandatory provision in the SRA Handbook. You must comply, unless there are specific exemptions or defences provided for in relevant legislation or the SRA Handbook.
Should
- Outside of a regulatory context, good practice for most situations in the Law Society's view.
- In the case of the SRA Handbook, an indicative behaviour or other non-mandatory provision (such as may be set out in notes or guidance).
These may not be the only means of complying with legislative or regulatory requirements and there may be situations where the suggested route is not the best possible route to meet the needs of your client. However, if you do not follow the suggested route, you should be able to justify to oversight bodies why the alternative approach you have taken is appropriate, either for your practice, or in the particular retainer.
May - A non-exhaustive list of options for meeting your obligations or running your practice. Which option you choose is determined by the profile of the individual practice, client or retainer. You may be required to justify why this was an appropriate option to oversight bodies.
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2 SRA Principles
There are ten mandatory principles which apply to all those the SRA regulates and to all aspects of practice. The principles can be found in the SRA Handbook.
When thinking about how to meet the outcomes in Chapter 1 in the Code, and the outcomes and indicative behaviours referred to in section 1.3 above, you must consider the principles which apply across the Handbook including the Code. You should always bear in mind what the ten principles are and use them as your starting point when implementing the outcomes.
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3. The effect of the changes
3.1 Introduction
You should inform clients in criminal cases about the changes to the Defendants' Costs Orders regime which came into effect for proceedings commenced from 1 October 2012. The changes are to section 16 of the Prosecution of Offences Act, as amended by Schedule 7 of the Legal Aid, Sentencing and Punishment of Offences Act 2012.
This practice note is based on information concerning the operation of Defendants' Costs Order regime contained in Ministry of Justice guidance published at http://www.justice.gov.uk/courts/national-taxing-team/litigators#onorafter1oct.
It also includes Law Society advice on the client care issues and costs information that arise from the changes to the Defendants' Costs Orders regime.
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3.2 Application of the system
The new system applies to all proceedings commenced on or after the 1 October 2012 and, for these purposes, proceedings are deemed to commence as follows:
- (a) in a magistrates' court, when a warrant, requisition or summons relating to the proceedings is issued;
- (b) on an appeal to the Crown Court, when a notice of appeal is served;
- (c) in the case of other proceedings in the Crown Court, when they are committed, transferred or sent to that court;
- (d) in the High Court, when an application for leave to appeal by way of case stated is made or (in the absence of such an application) when notice of appeal is given;
- (e) in the Court of Appeal, when an application for leave to appeal is made or (in the absence of such an application) when a Notice of Appeal is given;
- (g) in the Supreme Court, when an application for leave to appeal is made.
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3.3 Definition of legal costs
All proceedings that have commenced prior to the 1 October 2012 will continue to be governed by the previous system for awarding costs from central funds to successful defendants and appellants in criminal proceedings in respect of compensatory costs reasonably incurred by them in those proceedings.
In cases commenced after 1 October, the availability and amount of costs for a successful defendant/appellant will be determined under the new provisions in Schedule 7 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
Under the new provisions, legal costs are defined in a new section 16A(10) of the Prosecution of Offences Act 1985 (POA) as fees, charges, disbursements and other amounts payable in respect of advocacy services or litigation services including, in particular, expert witness costs.
The new section 16A(2) of the POA provides that legal costs can not be included in a Defendant's Costs Order other than in certain specified circumstances, which are set out in a new Section 16A (3)-(5) of the POA.
The specific circumstances where a Defendant's Costs Order may still include an amount in respect of legal costs are as follows:
- (a) where the accused is an individual and the order is made under section 16(1), 16(3), or section 16(4)(a)(ii) or (iii) or (d) of the POA;
- (b) where the accused is an individual and the legal costs were incurred in proceedings in a court below, which were either proceedings in a magistrates Court, or proceedings on appeal to the Crown Court under Section 108 of the Magistrates' Court Act 1980 (right of appeal against conviction or sentence); or
- (c) where the legal costs were incurred in proceedings in the Supreme Court.
It should be noted that, under the new legislation, companies and other legal persons cannot include their costs in a Defendant's Costs Order, except where the legal costs were incurred in proceedings in the Supreme Court.
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3.4 Magistrates' court proceedings
In simple terms, the new legislation provides that clients in the magistrates' court will be entitled to recover their costs under a Defendant's Costs Order if they are acquitted, but the amount will be limited to legal aid rates.
You must explain this to your clients and incorporate this information into your client care letter.
The amounts that may be recovered are set out in a Ministry of Justice document 'Calculation of amounts payable in respect of legal costs under defendants' costs orders', published 9 July 2012:
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3.5 Crown Court proceedings
Your clients appearing in the Crown Court, in respect of proceedings commenced on or after the 1 October 2012 (except in an appeal against conviction or sentence from a magistrates court), will not be entitled to recover their legal costs expended in successfully defending those proceedings if they chose to be represented privately.
The rationale for this policy position is that all defendants in the Crown Court will be entitled to legal aid whatever their means, but subject to a contribution.
It has to be remembered, however, that your clients who obtain legal aid will be entitled on acquittal to have the entirety of their contributions repaid to them. This is in contrast to those who chose to pay you privately for the cost of their defence, and who will not be entitled to recover their costs.
You must advise your clients of all the relevant funding options that are open to them and the advantages and disadvantages of each. You must also ensure that this advice is set out in any client care letter and, in particular, that the information includes reference to the new provisions set out above.
You must also advise existing clients of the change if you have not already done so.
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4 More information
4.1 Law Society
The Law Society's Practice Advice Service telephone 0870 6062522 email: practiceadvice@lawsociety.org.uk
4.2 Professional Ethics helpline
Solicitors Regulation Authority's Professional Ethics Helpline for advice on conduct issues. Telephone 0870 6062577
4.3 Other practice notes
The Law Society has published a practice note on client care letters.
4.4 Ministry of Justice guidance and legislation
Guidance on Defendants Costs Orders may be found at the Ministry of Justice website.
The Legal Aid, Sentencing and Punishment of Offenders Act 2012, schedule 7 can be found on legislation.gov.
4.5 Acknowledgment
The Law Society is grateful to Ian Kelcey, a member of the Criminal Law Committee, for his assistance in drafting this practice note.
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