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Defence costs orders

Last updated: 21 December 2015

What is the issue?

  • Practitioners should be aware that the provisions of Schedule 7 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 relating to Defendants' Costs Orders for the recovery of a successful defendant's legal costs apply to criminal proceedings commenced on or after the 1 October 2012.
  • This limited to legal aid rates legal costs recoverable in magistrates' court cases, and completely prevented the recovery of legal costs in (non-magistrates' court appeal) Crown Court cases.
  • However, following the introduction of a financial eligibility threshold for Crown Court legal aid from 27 January 2014, legal costs limited to legal aid rates are be recoverable in a Defendants' Costs Order.
  • You should advise your non-legally aided clients in criminal proceedings about the practical effect of these 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.

Legal status

This practice note is the Law Society's view of good practice in this area. It is not legal advice.

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.

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

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.

The principles apply to solicitors or managers of authorised bodies who are practising from an office outside the UK. They also apply if you are a lawyer-controlled body practising from an office outside the UK.

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.

The Law Society also provides a full glossary of other terms used throughout this practice note

1 Introduction

Solicitors need to inform non-legally aided clients in criminal cases about the Defendants' Costs Orders regime.

The regime applies to criminal proceedings commencing after 1 October 2012, arising from the Legal Aid, Sentencing and Punishment of Offenders Act 2012, and in Crown Court cases from 27 January 2014 arising from the introduction of a legal aid means test financial eligibility threshold.

1.1 Who should read this practice note?

All solicitors practising criminal law.

1.2 What is the issue?

  • Practitioners should be aware that the provisions of Schedule 7 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 relating to Defendants' Costs Orders for the recovery of a successful defendant's legal costs apply to criminal proceedings commenced on or after the 1 October 2012.
  • This limited to legal aid rates legal costs recoverable in magistrates' court cases, and completely prevented the recovery of legal costs in (non-magistrates' court appeal) Crown Court cases.
  • However, following the introduction of a financial eligibility threshold for Crown Court legal aid from 27 January 2014, legal costs limited to legal aid rates are be recoverable in a Defendants' Costs Order.
  • You should advise your non-legally aided clients in criminal proceedings about the practical effect of these 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.

2 The effect of the changes

2.1 Introduction

You should inform non-legally aided privately paying clients in criminal cases about the changes to the Defendants' Costs Orders regime which came into effect for proceedings commenced from 1 October 2012, and changes to Crown Court costs orders after 27 January 2014.

The changes are to sections 16 and 16A of the Prosecution of Offences Act 1985, ('the POA') as amended by Schedule 7 of the Legal Aid, Sentencing and Punishment of Offences Act 2012, and by the Costs in Criminal Cases (Legal Costs)(Exceptions) Regulations 2013.

2.2 Application of the system

The 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;
  • (f) in the Supreme Court, when an application for leave to appeal is made.


The changes introduced by the Costs in Criminal Cases (Legal Costs)(Exceptions) Regulations 2013 in the Crown Court apply to any 'relevant Crown Court proceedings', as defined in s16A(5A) POA from 27 January 2014, whether commenced before or after that date.

2.3 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 2012, the availability and amount of costs for a successful defendant/appellant will be determined under the new provisions in POA, as amended by 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 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.

From 27 January 2014 a further specified circumstance was added to s16A POA by the Costs in Criminal Cases (Legal Costs) (Exceptions) Regulations 2013 in relation to Crown Court cases.

The specific circumstances where a Defendant's Costs Order may 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;
  • d) where the accused is an individual and the legal costs were incurred in relevant Crown Court proceedings, as defined in POA s6A(11), and the Director of Legal Aid Casework has made a determination of financial ineligibility in relation to the accused and those proceedings (POA s16A(5A)).

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.

2.4 Magistrates' court proceedings

In simple terms, the new legislation provides that non-legally aided privately paying clients in the magistrates' court are entitled to recover their legal costs under a Defendant's Costs Order if they are acquitted, but the amount recoverable is limited to the amount that would be payable under specified legal aid rates.

You must explain this to your non-legally aided privately paying clients and incorporate this information into your client care letter.

The amounts that may be recovered are set out in a Gov.UK website page entitled ‘Guidance: claim back costs from cases in the criminal courts’.

2.5 Crown Court proceedings

Your clients 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, rather than accepting an offer of legal aid, from October 2012 until 27 January 2014.

The government's rationale for this policy position was that all defendants in the Crown Court were entitled to legal aid whatever their means, but subject to a contribution in this period.

After 27 January 2014 the 'Transforming Legal Aid' reforms introduce a financial eligibility threshold, so that anyone assessed under the means test on or after that date as having an annual household disposable income of £37,500 or more will be ineligible for legal aid in the Crown Court.

As a result, the government introduced a further exception, or specified circumstance to the Defendants' Costs Order regime in POA s16A, as set out in paragraph 3.3 above, so that an acquitted (or otherwise successful) Crown Court defendant who has paid for legal services may recover their legal costs, limited to the amount that would be payable under specified legal aid rates.

It is very important to note that the exception, or special circumstance allowing a Defendant's Costs Order to include legal costs, in s16A(5A), requires that the Director of Legal Aid Casework has made a determination of financial ineligibility in relation to the accused and those proceedings.

To ensure that your non-legally aided client is entitled to recover legal costs, limited to legal aid rates, in the event of their acquittal they must apply for, and be determined to be ineligible for, legal aid.

Defendants who obtain legal aid will continue to be entitled on acquittal to have the entirety of their legal aid contributions repaid to them.

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 effect of the provisions set out above. You must advise your client to apply for legal aid, even if likely to be ineligible, to preserve their right to recover some of their legal costs, in the event they are acquitted or otherwise successful.

If your firm does not have a contract with the Legal Aid Agency, and your client wishes to apply for legal aid, you should advise them that they could approach a firm of solicitors that does have a legal aid contract, in order to make an application for legal aid, on the understanding that if legal aid is refused the client will revert to your firm.

If legal aid is granted the client will need advice on whether to accept the offer of legal aid or revert to your firm in the knowledge he or she will not be able to recover any costs if acquitted. However there is, of course, a risk the client may prefer the other firm and there cannot be an agreement between you and the other firm to fetter client choice.

3 More information

3.1 Law Society

The Law Society's Practice Advice Service telephone 020 7320 5675 email: practiceadvice@lawsociety.org.uk  

3.2 Professional Ethics helpline

Solicitors Regulation Authority's Professional Ethics Helpline for advice on conduct issues. Telephone 0370 606 2577

3.3 Other practice notes

The Law Society has published a practice note on client care letters.

3.4 Ministry of Justice guidance and legislation

3.5 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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