bigstock-Legal-Advice-Wooden-Wall-Hands-76456850By Alan Murdie, chair  of Nucleus and editor of the Council Tax Handbook (CPAG)

An important judicial review hearing on the amount of costs which can be charged when making any application for a liability order for unpaid council tax reaches the High Court on Thursday, April 30th.

Last October the High Court (Green, J) granted leave to bring judicial review of a decision by Tottenham Magistrates concerning the amount of costs claimed by Haringey Council in recovery proceedings for council tax.

The application judicial review arose from an appeal commenced by a retired vicar, the Revd. Paul Nicolson of Haringey over the standard award of £125 in liability order costs granted to Haringey Council in 2013 by the Tottenham Magistrates’ Court. The Revd Nicolson maintains the sum is unlawful because of the blanket approach taken by Haringey Council in seeking an identical amount for the issue of  summonses  against all debtors and the holding of  full hearings. He is further challenging the actual amount being claimed as excessive.

The council tax enforcement regulations envisage a local authority  recover costs ‘reasonably incurred’ in the step of issuing a summons but reasonable is not defined. In any other form of proceedings a lawyer claiming costs for litigation is expected to be able to justify the demand and make clear the amounts charged to both the client and to the court if asked for an explanation. A process known as assessment can be used to check the costs claimed by an individual barrister or solicitor. Lawyers charge for the work actually undertaken on a case and preparing it and the essential steps of litigation. Yet local authorities are adding sums to thousands of liability order applications despite the process being almost fully automated with computers governing the recovery process at every stage. It thus requires virtually no legal knowledge or skill whatsoever. All that the local authority officer or lawyer has to do in the vast majority of cases is present a list of non-payers to the court and computer prints outs establishing the list and procedural steps on bills and reminder notices.

A summons is, of course, necessarily  issued to get the taxpayer to court but a Parliamentary answer in 2009 established this costs £3.00. So what is the other £122 for in the case of the Revd Nicolson one may ask – and that of every other taxpayer in Tottenham subject to liability order proceedings? Broadly speaking this is a key issue which the High Court will examine –and thus  is it lawful to cash in from proceedings against taxpayers?

It may be noted that sums being claimed for liability order costs differ markedly over England and Wales – councils are typically adding sums between £80 – 130 to any single application for a liability order. Yet the basis on which the costs are calculated, set and agreed with magistrates is in no way clear and the precise statutory basis for them is vague. The amounts vary enormously between authorities and it is hard to escape the conclusion that many local authorities – with apparent connivance from Her Majesty’s Courts and Tribunal Service officials – are plucking these  figures out of the air. Given that a council in London will typically take 1000  or more taxpayers to court in one bulk application heard on one day, the sums involved are huge as the sum of £125 is added to every liability order.

It is hard to escape the conclusion that the levying of costs on legal proceedings has thus slipped over into a disguised revenue raising measure and a source of profiteering with no basis in law. The Rev Nicolson stated: “I am claiming that the Haringey costs amount to an excessive and disproportionate penalty, rather than a genuine and rational contribution to costs, and as such are unlawful.”

It is a long standing constitutional  and interpretative principle that any sum demanded from the subject must have a very clear basis in statute to be lawful. If it is not the case then the state is not entitled to claim the money. It is a principle which has been strictly observed by the courts in every other branch of taxation law – and which accounts for the health of the revenue Bar in this country. However, these questions have not been examined in local taxation properly for many years.

During the 1990s the High Court did not hesitate in upholding rights and principles of justice for taxpayers who were unable to pay sums demands for poll tax. It is to be hoped that the same robust approach will be applied to council tax.

For those who know their legal history it is perhaps appropriate that this hearing is by judicial review. The right of judicial review is medieval in origin and grew up from the practice of subjects petitioning the Monarch when Crown Servants abused their position, for example by levying extortionate taxes or claiming sums to which they were not entitled – effectively the remedy for the levies of the Sheriff of Nottingham and his ilk.



The enforcement regulations are the Council Tax (Administration and Enforcement) Regulations 1992 SI 613.

Judicial review is a two stage process, first requiring leave, and the need for a claimant to show an arguable case. This the Revd. Nicolson did after the magistrates refused to participate in his first appeal. He was represented pro bono by Helen Mountfield QC.   The attention of the High Court was drawn in a skeleton argument to Reg 34(5) of the enforcement regulations which provides:

“If, after a summons has been issued in accordance with paragraph (2) but before the application is heard, there is paid or tendered to the authority an amount equal to the aggregate of –

            (a) the sum specified in the summons as the sum outstanding         or so much of it as remains outstanding (as the case may be);      and

            (b) a sum of an amount equal to the costs reasonably incurred       by the authority in connection with the application up to the        time of the payment or tender,

the authority shall accept the amount and the application shall not be proceeded with.


Thus the regulations envisage a local authority  recover costs ‘reasonably incurred’ in the step of issuing a summons,  and, alternatively,   those costs reasonably incurred in issuing a summonsand having to obtain a liability order if one becomes necessary. It is evident, therefore, that the two sums fall to be calculated and claimed separately – costs which entail a liability order hearing and those which do not where the debtor pays up on being summonsed.

However, the Revd. Nicolson  argued that  Haringey Council has been seeking the same standard sum of £125 costs for both situations, despite them being distinct steps. A reply under the Freedom of Information Act show that in 2009, Haringey Council standardized the cost for “summons and liability” to a single amount, seeking the same sum for both issuing a summons and also for going on to making a liability order.

These Freedom of information Act requests suggesting the figure of £125 does not properly reflect the actual cost reasonably incurred by Haringey Council in proceedings were referred to in the skeleton argument put before the High Court on October 7th.

In  his  application, it is argued that   the costs reasonably incurred in issuing a summons only cannot be equal to the costs reasonably incurred in both issuing a summons and obtaining a liability order. Since strict compliance is expected at law with taxation statutes it appears that this is an arguable point, and leave to continue the appeal has duly been granted.

The roots of this problem lie in the council tax legislation itself, together with the fact that rules for costs in magistrates’ courts in civil cases are none too clear. It also appears many magistrates’ courts and councils have been reading regulations under the presumption that there is no discretion as to costs when the matter reaches the court. However, the grant of leave indicates that the matter is genuinely arguable and that the magistrates’ court may enjoy greater flexibility as to costs than hitherto been considered. Otherwise the inclusion of the words “reasonably incurred” used in the regulations would lack any meaning. The legal basis of how Haringey reached its figure of £125 still remains wholly unclear – it will be interesting to see what justification they give at the hearing.