Full case report
R (UK2 Telecom Limited) v Sir Hayden Phillips, Independent Reviewer of ASA Adjudications
Court Administrative Court
Judge Dobbs J
Date of Judgment 16 Aug 2012
UK2 Telecom Limited- Sir Hayden Phillips- The Advertising Standards Authority- Judicial Review – Costs - proceedings concluded before permission
Following an investigation, the ASA held that an internet advert of UK2 Telecom Limited's (the "C") (on the Google banner) breached the CAP Code (“the Adjudication”). That decision arose out of the ASA’s own challenge to the advert. The ASA rejected another complaint from a competitor.
C appealed to D, Sir Hayden Phillips, the Independent Reviewer of ASA Adjudications, arguing that the Adjudication was substantially flawed. D rejected C’s challenge (“the First Decision”).
C sent a pre-action protocol letter before claim to D and the ASA setting out why the Adjudication and First Decision were irrational. D’s initial response indicated that he conceded C’s claim in full and would be asking the ASA to reconsider the whole matter. D said he would respond substantively after some further work. Consequently C held off issuing proceedings.
Three weeks later, D’s first substantive response to the letter before claim (“the Second Decision”) made clear that in fact D did not accept key aspects of C’s claim regarding the irrationality of the First Decision and Adjudication. It was evident that D was about to progress the matter in a way which C considered unfair.
C wrote to D setting out its concerns, stating that at no stage had D made reference to a recent, germane ASA rule change - that the ASA should make its own challenges to adverts “… only in exceptional circumstances…”. C reserved its right to issue proceedings in the absence of a satisfactory response within seven days.
On the eighth day C issued JR proceedings against D, naming the ASA as an Interested Party. D’s response crossed with filing of the claim form, but rejected most of C’s concerns. D stated he would be unable to progress the matter further for a number of weeks. Accordingly, C served proceedings on D, seeking the Administrative Court’s intervention.
D filed an Acknowledgment of Service and Summary Grounds of Resistance, but a month later he informed C that he now intended to recommend that the Adjudication be expunged and that there should be no further investigation of C’s advertisement. The Adjudication was later expunged by the ASA, in March 2012.
In effect the claim was conceded, and C applied for its costs from the preparation of the letter before claim. The issue was dealt with on written submissions. D argued that the proceedings had been unnecessary in respect of the First Decision (as that decision had been withdrawn); that the challenge to the Second Decision was premature; that C had not followed the Pre Action Protocol in certain respects; and that issuing proceedings had been an exercise in recovering sunken costs, which was not allowed.
1. Was C justified in issuing proceedings?
2. If so, was C entitled to its costs on the basis that it had obtained the remedy it sought, bearing in mind that the claim had been settled prior to ‘permission’.
D to pay C’s costs of the proceedings from the preparation of the first letter before claim up to and including the costs submissions, to be taxed if not agreed.
The Court observed that:
1. The proceedings were properly brought and the claim had a good prospect of success.
2. C had complied with the pre-action protocol.
3. C obtained the remedy sought.
4. Whilst D had properly effectively conceded the claim, his response to the first pre-action protocol letter was inadequate.
5. The Claim was originally contested in the Acknowledgment of Service.
6. D’s overall conduct (including delay in responses and lack of awareness of a relevant rule) was wanting.
The final Order confirms that:
(1) a claimant is entitled to bring proceedings for judicial review where a defendant in receipt of an adequately formulated letter of claim fails to provide an adequate response;
(2) that if such a claimant obtains the relief sought or substantially the same relief, he should be awarded his costs; and
(3) these principles apply equally where claims become unnecessary due to concession prior to ‘permission’, as they do following.
The decision confirms R (Bahta) v Secretary of State for the Home Department  EWCA Civ 895 5 Costs LR 857, which reconsidered the principles set out in R (Boxall) v Waltham Forest LBC (2001) 4 C.C.L. Rep 258 (in light of the CPR Pre Action Protocols and the Jackson LJ Review of Civil Litigation Costs) to be applied where a court is asked to determine costs issues where the merits of a claim have not been determined by the court.
C: Russell-Cooke LLP