Costs protocol relating to legal representation at public expense

Introduction

1. This Protocol relates to:

applications by persons who claim to be eligible under section 40(3)(a) or 40(3)(b) of the Inquiries Act 2005 (“the Act”) (“applicant”) for an award to be made under section 40(1)(b) of the Act for expenses to be incurred in respect of legal representation (“legal expenses”); and
following a decision to make an award, the assessment of legal expenses which become payable under it.

2. Issues relating to the designation of a person as a Core Participant in the Inquiry, and of a qualified lawyer as the recognised legal representative of a Core Participant and/or an individual witness, are dealt with separately to the question of funding and are not intended to be within the scope of this Protocol.

3. The procedures set out in this Protocol are subject to, and should be read in accordance with, the provisions in the Act, specifically but not limited to sections 17 and 40 and the Notice of Determination made by the Minister under section 40(4) of the Act (“Minister’s Determination”) set out in the Annex to this Protocol, and Rules 19 to 34 of the Inquiry Rules 2006 (SI 2006/1838) (“the Rules”).

General principles concerning applications for awards

4. A person is eligible to be considered for an award only if he or she is:

a person attending the Inquiry to give evidence or to produce any document or information; or
a person who, in the opinion of the Chair, has such particular interest in the proceedings or outcome of the Inquiry as to justify such an award.

5. In exercising his power to make an award relating to legal representation at public expense:

the Chair will act with fairness and with regard also to the need to avoid any unnecessary cost (whether to public funds, to witnesses or to others); and
will ensure that he complies with the qualifications and conditions set out in the Minister’s Determination.

6. Subject to the qualifications and conditions in the Minister’s Determination, the Chair will, when determining an application for an award relating to legal expenses to be incurred, take into account:

the financial resources of the applicant; and
whether making an award is in the public interest

7. Having regard to the criteria set out in paragraph 6 of this Protocol, the considerations set out in the Minister’s Determination and to his powers under section 17(1) of the Act, the Chair envisages that normally awards will be made only in cases where he decides that:

the applicant
- has a direct link to, and evidence to provide in respect of, the matters set out in the Inquiry’s terms of reference; and/or
- has a significant interest in an important aspect of the matters set out in those terms of reference; and/or
- may be subject to explicit or significant criticism during the Inquiry’s proceedings or in the report, or in any interim report; and
- the applicant would be prejudiced in seeking representation if there were to be any doubt about funds becoming available and there are no other means by which such representation can be funded; and
- it is fair, necessary, reasonable, and proportionate to make an award.

8. Awards will generally not be made, therefore, in respect of the legal expenses of substantial bodies, or those of individuals or organisations who could reasonably expect those expenses to be met by such bodies, or where there is an umbrella group which could adequately represent their interests, unless there are special circumstances which justify a call on public funds.

The scope for legal representation in the Inquiry at public expense

9. Where the Chair determines to make an award, it will normally be limited to a recognised legal representative having a role in relation to some or all of only the following matters:

considering and relaying initial instructions from those they have been instructed to represent (“the client”);
advising the client in relation to the making of a witness statement, and/or otherwise providing evidence to the Inquiry, in accordance with any request made by the Inquiry under Rule 9 of the Rules;
considering the material contained in the Inquiry Bundle(s) (or any limited Bundle in the case of an individual witness who is not a Core Participant) so far as is necessary properly to represent the client’s interests;
advising the client in relation to any warning letter issued by the Chair under Rule 13 of the Rules;
making an opening statement, where permitted;
representing the client during their oral evidence (and the evidence of others, should that be necessary);
making an application for permission to examine any witness giving oral evidence in the circumstances specified by the Chair;
making final submissions on behalf of the client, where necessary.

10. Under rule 7(2) the Chair must direct that core participants shall be represented by a single recognised legal representative where he considers that:

their interests in the outcome of the inquiry are similar;
the facts that they are likely to rely on in the course of the inquiry are similar; and
it is fair and proper for them to be jointly represented.

11. Therefore, wherever possible, and in order to minimise the expense, applicants are and will be encouraged to instruct recognised legal representatives who are already retained by other parties.

12. Where the Solicitor to the Inquiry has reason to believe that the interests of any applicant may conflict with the interests of any other parties, he shall ensure that the fact of such potential conflict is made known to those involved and to the Chair, and that fact will be taken into account when determining whether public funding for legal assistance should be made available.

Applications for awards and the procedures for agreeing the level of funding

13. An applicant who wishes to apply for an award relating to legal expenses to be incurred should submit an application to the Chair in writing specifying the following:

the reason(s) why legal representation is considered necessary;
the extent of the applicant’s financial resources and confirmation that there are no other means by which such representation can be funded;
the nature of the public interest that will be served by an award being made from public funds (see Rule 21(2)(b) of the Rules);
the nature, function and extent of the legal representation for which the award is sought;
the size and composition of the team that the applicant’s recognised legal representative proposes to engage, including the seniority and proposed hourly charging rate for all solicitors and paralegals to be so engaged, subject to the following maximum hourly rates:

Counsel	Hourly rate
Leading Counsel (Whether a member of the Bar or a Solicitor as advocate)	£220
Junior Counsel (Whether a member of the Bar or a Solicitor as advocate)	£120
Solicitors with over eight years’ post qualification experience	£175
Solicitors and legal executives with more than four years’ experience	£150
Other solicitors, legal executives and fee earners of equivalent experience	£125
Trainee solicitors, paralegals and other fee-earners	£100

where it is thought necessary to instruct Counsel, the reasons for so doing, the date of call of that Counsel and proposed hourly rate, subject to the maximum hourly rates specified above (Note that the employment of Counsel will be funded only on the basis of payment for time spent. It will not be acceptable to submit general claims along the lines of a ‘brief fee’, ‘refresher’ or ‘preparation’);
the estimated duration of the recognised legal representation;
the number of hours each week for which it is anticipated that the recognised legal representative’s team will be engaged on Inquiry work, having regard to the interest of the applicant and the part of the Inquiry in which they are seeking to participate;
the number of hours each week for which it is anticipated that Counsel (if permitted at public expense) will be engaged on Inquiry work;
the amount of time that it is anticipated will be spent in conference at the end of each day of the oral hearings;
particulars of any other foreseeable expenses relating to legal representation

14. Subject to the cap on the maximum number of hours that can be charged by an applicant’s recognised legal representative–

the representative will agree with the Solicitor to the Inquiry in advance the hourly rates that are to apply to him or her and/or to any other qualified lawyer who, if the Chair approves his or her involvement, will be appointed to assist him or her in the discharge of his or her function; but
in the event that no agreement can be reached regarding hourly rates, the Chair will determine such rates as he considers appropriate upon receipt of representations in writing on behalf of the applicant.

15. The maximum hourly rates for travel and waiting time by the members of an applicant’s legal team shall be half the agreed hourly rate relating to legal work. Any travelling and/or waiting time must be included within the cap on the maximum number of hours that can be charged by an applicant’s recognised legal representative and in no case will it be in addition to the cap on hours.

Determination of applications by the Chair

16. Having regard to the provisions of the Act, the Rules and the provisions set out in this Protocol, the Chair will determine an application for an award within a reasonable time.

17. The Solicitor to the Inquiry will notify the applicant and, where applicable, his, her or its recognised legal representative in writing of the Chair’s determination and, where an award is made, the terms of the award. Such terms may include (but are not limited to) the following:

the nature and scope of the work that is to be funded, as agreed in advance with the Solicitor to the Inquiry; this is likely to be in relation to some or all of the matters set out in paragraph 9 of this Protocol. (Normally, an applicant’s recognised legal representative will not be reimbursed for investigative work as this is the role of the Inquiry. Similarly, payment will not be made for obtaining items such as expert reports, unless previously authorised by the Solicitor to the Inquiry);
the size and composition of the recognised legal representative’s legal team to be engaged, including the seniority and number of counsel where that is agreed to be necessary;
the hourly rates for all counsel, solicitors and paralegals to be engaged;
any capping of legal fees that is to be applied whereby legal teams (including Counsel) will be capped as to the maximum number of hours that can be charged for any working day or working week, even though the number of hours actually worked exceeds that maximum;
that disbursements in excess of £100 (net of VAT) will not be paid unless authorised in advance by the Solicitor to the Inquiry. Disbursements under £100 will only be paid where the expenditure is adjudged to have been reasonable and necessary and where they are supported by evidence of payment;
that the award is subject to the condition that payment will only be made for work that is properly evidenced and can be identified as having been done in an efficient and effective manner, avoiding unnecessary duplication and making the best use of public funds;
the form in which bills relating to legal expenses are to be submitted;
the frequency with which bills are to be submitted.

18. Expenditure incurred before the making of an award will not normally be recoverable, except where it has been expressly agreed in advance by the Solicitor to the Inquiry on behalf of the Chair. Any such prior agreement will be without prejudice to the Chair’s consideration of any subsequent application made.

19. It will be open to the Chair, either initially or at any time after making an award, to impose further conditions on the award. In particular, he may determine that a lower cap should be imposed in relation to legal expenses that may be incurred at public expense. This may amount to an overall financial limit and/or a limit on the number of hours to be spent on Inquiry business.

Billing procedures

20. An applicant, in relation to whom the Chair has decided in accordance with this Protocol that an award should be made, should submit bills relating to their legal expenses at monthly intervals to the Solicitor to the Inquiry at the email address stated in paragraph 31 below. Such bills are to be received no later than 7 days immediately following the end of the month to which they relate, with a final account to be submitted no later than one month after final submissions are made.

21. Bills submitted in accordance with paragraph 20 above should contain the following information:

a breakdown of the number of hours worked by each person on each day specifying, in each case, details of the work undertaken and the time spent on it;
the hourly rates charged for each person. These will be those specified by the Chair in his original determination of the application for expenses to be incurred in relation to legal representation;
a list of all disbursements claimed;
where work has been undertaken by Counsel, details of Counsel’s fees (supported by fee notes which must specify precisely which work was done and how much time was spent on it).

Procedure for the assessment of amounts payable under an award

22. The relevant part of the United Kingdom for the purposes of the assessment of an award shall be England and Wales.

23. The Solicitor to the Inquiry will assess the amount of the award. In assessing the amount that is to be awarded pursuant to the application the Solicitor to the Inquiry will have regard to all the circumstances, including in particular whether the expenses–

were proportionately and reasonably incurred; and
are proportionate and of a reasonable amount.

24. Any work undertaken by an applicant’s recognised legal representative which relates to matters outside the Inquiry’s terms of reference and/or the issues it identifies for investigation, or which otherwise does not comply with the terms of the award notified to the applicant under paragraph 15 of this Protocol, will be disallowed.

25. Where the Solicitor to the Inquiry determines that the full amount of an applicant’s legal expenses should be paid, that assessment is also the final assessment.

26. If the applicant or his or her recognised legal representative disagrees with the Solicitor to the Inquiry’s initial assessment of a bill relating to their legal expenses, the procedure set out in Rule 29 shall be followed.

Review of an assessment of an amount payable under an award

27. Where there remains a disagreement following completion of the procedure set out in Rule 29 the Chair must, in accordance with Rule 31, either–

engage the assistance of a Costs Judge of the Senior Courts of England and Wales by referring the assessment together with all relevant evidence and documentation to that Costs Judge; or
require the Solicitor to the Inquiry to issue a final assessment of the disputed Bill of Costs.

Making an award

28. Where–

the Chair decides further to Rule 31(1)(b) that an award is not to be reviewed in accordance with sub-paragraph (1)(a) of that Rule, or
the Solicitor to the Inquiry and the applicant agree on the amount of the assessment at any time after the Chair’s referral of the application to the Costs Judge and before the date of the review hearing, the Chair will make an award and arrange for payment of the final assessment in accordance with Rule 34(1).

29. Where the Costs Judge has reviewed the amount of the award in accordance with Rule 31, the Chair will make an award and arrange for payment of the Costs Judge’s assessment in accordance with Rule 34(2).

30. All payments will be made either by Bankers’ Automated Clearing System (BACS) or payable order at the Inquiry’s discretion. To enable payment to be made, a Claimant will be required to complete the appropriate documentation supplied by the Inquiry and/or provide bank account details. When completed and signed, the documentation should be returned to to whom any queries relating to the processing of payments should also be directed.

31. The Inquiry’s contact details are as follows:

Email: solicitor@postofficehorizoninquiry.org.uk
Post: Post Office Horizon IT Inquiry, 5th Floor, Aldwych House, 71-91 Aldwych, London, WC2B 4HN.

Please note that there is likely to be a delay in responses to postal communications due to the current COVID-19 pandemic.

32. It should be noted that failure to adhere to, and comply with, any of the matters or procedures set out in this Protocol or its Annex could result in payment being delayed or refused.

33. The Chair and Solicitor to the Inquiry retain the discretion to vary the application of the terms of this protocol on a case-by-case basis where it is considered necessary for the proper conduct of the Inquiry, subject to the constraints of any Minister’s Determination.

Issued under the authority of the Chair on 28 June 2021

Notice of Determination

Notice of Determination by the Minister for London and Parliamentary Under Secretary of State (Minister for Small Business, Consumers and Labour Markets) to the Chair of the Post Office Horizon IT Inquiry under Section 40(4) of the Inquiries Act 2005

1. The Minister for London and Parliamentary Under Secretary of State (Minister for Small Business, Consumers and Labour Markets) (the “Minister”) has determined under section 40(4) of the Inquiries Act 2005 (the “2005 Act”) that the power of the Chair of the Post Office Horizon IT Inquiry (“the Inquiry”) to award amounts in respect of legal representation under section 40(1) and (2) of the 2005 Act to persons eligible for an award under section 40(3) shall be subject to the following qualifications and conditions.

2. The qualification and conditions are:

2.1. Given the exceptional nature and gravity of the Post Office Horizon scandal, the Minister for London and Parliamentary Under Secretary of State (Minister for Small Business, Consumers and Labour Markets) considers that it is overwhelmingly in the public interest that those applicants it particularly impacted, namely the affected sub-postmasters, managers and assistants, who would otherwise be eligible for an award under section 40(3) of the Act, are provided such funding by the government.

2.2. Accordingly, Rule 21 of the Inquiry Rules 2006 is qualified to the extent that the general criteria in Rule 21(2)(a) (financial resources) is satisfied without further enquiry as to means, on an application for an award for legal expenses by:

2.2.1. Sub-postmasters who were directly and adversely affected by failings in the Horizon IT system;

2.2.2. Managers and assistants who were (i) investigated and alleged by Post Office Limited (“POL”) to be personally liable for shortfalls (ii) personally threatened with civil or criminal liability as a result of POL’s reliance upon Horizon data; or (iii) subject to civil or criminal proceedings brought by POL in reliance upon Horizon data; or

2.2.3. A spouse or relative of a deceased person who, prior to his or her death, fell into category (2.2.1) or (2.2.2) above,

who otherwise qualify for an award under section 40 of the Act, the Inquiry Rules, this determination and any costs protocol issued by the chairman.

2.3. The Chair shall only make an award relating to a person’s costs of legal representation in relation to the Inquiry where he considers it necessary, fair, reasonable and proportionate to make such an award.

2.4. The Chair shall take account of the principles of Managing Public Money when making any award.

2.5. Any award must be subject to the condition that payment will only be made for work that is properly evidenced, directly related to the work of the Inquiry as determined by any costs protocol issued by the Chair and can be identified as having been done in an effective and efficient manner, avoiding unnecessary duplication and making the best use of public funds.

2.6. An award shall be made only in respect of legal work undertaken by an applicant’s legal representative whom the Chair has designated under either rule 6 or rule 7 of the Inquiry Rules 2006 (the “Rules”) to be that person’s recognised legal representative in relation to the Inquiry, unless the Minister agrees otherwise.

2.7. To avoid duplication and to minimise costs, the Chair shall not make awards in respect of separate legal representation for core participants where, pursuant to Rules 7(1) and (2), single representation of persons with similar interests in the Inquiry should be directed.

2.8. The Chair shall generally not make awards in respect of the legal expenses of:

2.8.1. substantial bodies; or

2.8.2. the legal expenses of individuals or organisations, which could reasonably be expected to be met by such bodies or where there is an umbrella group which could adequately represent their interests which is already being funded,

Unless there are special circumstances, which justify a call on public funds.

2.9. If an applicant’s recognised legal representative engages a legal team, an award shall be made in respect of work undertaken by that team only if the Chair has approved its size and composition, including the seniority and number of any counsel whose retention he agrees to be necessary. Costs associated with work carried out by legal representatives who are not approved in advance of the work being carried out shall not be met from public funds.

2.10. Any award must specify the nature and scope of the work that is to be publicly funded. Legal representatives must not be publicly funded for work that does not fall within the specified scope. When making any award the Chair shall specify the hourly rates applicable to all members of the applicant’s approved legal team, subject to the maximum hourly rates specified at paragraph 4 below.

2.11. An inquiry under the 2005 Act is inquisitorial in nature and investigative work or work in relation to obtaining expert reports will not be paid for from public funds unless the Chair gives express written permission in advance for such work to be carried out.

2.12. An award shall limit the maximum number of hours that can be charged by any member of the applicant’s legal team in any week to 40 save that, exceptionally, the Solicitor to the Inquiry may authorise an increase to the maximum of 60 hours during the oral hearings and a specified period not exceeding 6 weeks prior to such hearings where he is satisfied that such increase is justified in all the circumstances. For the purposes of this paragraph a week shall be taken to commence on a Monday and end on the following Sunday, and no unused hours below the maximum in any one week may be set off against any other week.

3. The Chair:

3.1. Shall only make an award to a person relating to compensation for loss of time (subject to paragraph 3.2) or the costs of legal representation in relation to the Inquiry where he considers it necessary, fair, reasonable and proportionate to make such an award, and that such an award is an appropriate use of public funds; and

3.2. Shall only make an award relating to compensation for loss of time where the person to be compensated would otherwise face actual financial loss, for example (but not limited to) receipt of monies related to that person’s employment.

4.Where the Chair has determined that an award in respect of legal representations should be made, the hourly rates to be paid must not exceed:

4.1. Senior Counsel (whether a member of the Bar or a solicitor advocate): £220

4.2. Junior Counsel (whether a member of the Bar or a solicitor advocate): £120

4.3. Solicitor with over 8 years’ post-qualification experience: £175

4.4. Solicitors and legal executives with over 4 years’ experience: £150

4.5. Other solicitors, legal executives and fee-earners of equivalent experience: £125

4.6. Trainee solicitors, paralegals and other fee-earners: £100

5. The maximum hourly rates for travel and waiting by the members of an applicant’s legal team shall be half of the applicable maximum hourly rate relating to legal work specified at paragraph 4.

6. Expenditure incurred by an applicant in respect of legal representation before an award is made by the Chair shall not be recoverable except where (and to the extent that) it has been incurred with the prior agreement of the Solicitor to the Inquiry.