R v- Coulson and Edmondson

R v- Coulson and EdmondsonJudgment on prosecution application for costs

1. I will consider the Prosecutions application for costs against each Defendant separately but there are certain general principles that are common to both Defendants which I will set out first. These principles derive from the Prosecution of Offences Act 1985; the Practice Direction (Costs in Criminal Proceedings) and various authorities from the Court of Appeal.2. The relevant part of s. 18(1) (c) of the Prosecution of Offences Act 1985 reads where any person is convicted of an offence before the Crown Court, the court may make such order as to the costs to be paid by the accused to the prosecutor as it considers just and reasonable. 3. The statute gives the Judge a very wide discretion which must, of course, be exercised judicially. Certain matters which the court should have in mind are set out in the practice direction. The Court of Appeal has considered and ruled on issues such as how costs orders should be apportioned between Defendants and whether a costs order should be made which would result in the family home having to be sold. These decisions of the Court of Appeal were decided on their own particular facts and do not purport to set out general principles. The Court of Appeal would not seek to fetter the exercise of a broad discretion given to the trial Judge by Parliament provided that any order made was just and reasonable. It is not necessarily easy to reconcile the decisions of the Court of Appeal in the cases of R v- Ronson and Parnes 1992 13 Cr. App. R.(S) 153 and R v- Fresha Bakeries Limited 2003 1 Cr App R (S) 44 to which I have been referred. I have also been referred to decisions of the Court of Appeal dealing with costs orders which would involve the sale of the family home. I do not accept that the cases of Pegley 2012 EWCA Crim 25 and R v- Young 2010 EWCA Crim 1276 lay down any general principle that it can never be just and reasonable to make an order for costs which would involve the Defendant having to sell the matrimonial home. There will be occasions when it is just and reasonable to make such an order, there will be other occasions when it is not. Nor do I accept that there is any general rule that the court should not make an order for costs which would involve hardship to innocent people, particularly the children of a Defendant. All of these are factors to be taken into account in deciding whether an order for costs is just and reasonable but they are not absolute rules. 4. There are certain clear principles: An order should be made if the Defendant has the means to pay.

The purpose of the order is to recompense the prosecution for money it has expended and not to be a penalty.

An order should not be made on the assumption that a 3rd party might pay.

5. It may well be that in the past a more relaxed attitude has been taken to making costs orders against Defendants, particularly those who are required to serve a prison sentence. Courts have been keen not to make orders against Defendants which may interfere with their attempts to rehabilitate themselves.

6. Now, in particular because of the restraints on public finances, it is recognised that the courts should make orders for costs where Defendants have put the public to expense by committing criminal offences provided it is just and reasonable to do so. The public would find it very difficult to understand why orders for costs are not made against Defendants who appear to have the means to pay. It is clear that an order for costs should not be imposed as an additional penalty. Provided that a person has the means to pay and the amount claimed is not in excess of the amount expended by the Prosecution, an award of costs would not be a penalty. It would be a repayment to the state for the expense that a Defendant has caused it by committing criminal offences.7. Andy Coulson: I have already issued to the parties a draft judgment as to the effect on any order for costs of Mr. Coulsons contention at the time of the earlier hearing that he was entitled to look to News UK to indemnify him as to any order for costs that I make. The basis for that was an agreement entered into by Mr. Coulson and News International which the Court of Appeal has ruled covered the costs of Mr. Coulsons defence. For reasons that I will explain, that ruling has now become academic. I did invite comments from the parties on my draft ruling.8. I have re-considered the initial arguments and the comments on my draft decision as to the indemnity and in deference to the work that went into the submissions and the skill with which they were argued, I will set out my brief conclusions.

If News UK were liable under the indemnity to meet any order for costs made against Mr. Coulson then that is a relevant factor which should be taken into account when assessing whether he had the means to meet any order. I do not agree with the submission of News UK that I should not take the indemnity into account in assessing means even if the indemnity did cover any order for costs. If Mr. Coulson was entitled in law to look to News UK to indemnify him against any order for costs, then that is an asset which a Court would be entitled to take into account as part of Mr. Coulsons means. The contrary submission seems to me to be contrary to common sense. If News UK entered into a contractual agreement which covered the costs of the prosecution, why should that not be taken into account when considering Mr. Coulsons ability to pay? I agree with News UK that it is not for me to resolve the legal issue as to whether the indemnity does cover an order for prosecution costs. News UK are not a party to these proceedings and would not be able to appeal any award of costs that I might make. For that reason, if Mr. Coulson were still contending that he had a claim against News UK under the indemnity, then I would have to consider whether it was possible to have that issue determined by a Court with jurisdiction to decide the issue before making a final decision on any costs order. I agree with the prosecution that full disclosure must be made by Mr. Coulson of any contribution that News UK have agreed to make towards any order for costs, whether that is voluntary or under any form of agreement.

I would need to consider whether any offer of contribution towards the costs made by News UK could be enforced if they changed their minds, before deciding how, if at all, it should be reflected in any order for costs. If the situation was that News UK might make a contribution to the costs then I could not take that into account. Only if Mr. Coulson had a right to look to News UK for payment could it be relevant to an assessment of his means. 9. In the event these considerations have become academic as Mr. Coulson has decided not to seek an indemnity for costs against News UK under the agreement. I am told that he has received advice from counsel which is not favourable and I have read the case of Safeway Stores Ltd v- Twigger on which that opinion is based. While I express no view one way or the other as to the likely outcome of litigation, I can understand the basis of the argument. I have no reason to suppose that there has been any sort of agreement reached between News UK and Mr. Coulson to encourage him not to pursue any legal action. I am confident that I would have been informed of that fact if it had occurred. To do otherwise would be to mislead the court, which would be a serious matter.10. I have invited the CPS to consider whether they should seek an assignment of Mr. Coulsons rights under the indemnity agreement, if they consider that it did cover any award that I might make as to prosecution costs. I have not considered whether there is power to make such an assignment or whether Mr. Coulson could be made to agree to it. In any event having considered the matter, the prosecution have decided not to pursue it.

11. I therefore exclude from my consideration of the appropriate order for costs, any contribution from News UK. 12. The amount of costs: the prosecution claim against Mr. Coulson 750,000 as his share of the total costs which were 1.7m. It is clear from the application for costs from central funds by News UK on behalf of the acquitted Defendants whose defence they paid for, that the total amount claimed by the prosecution to cover the costs of the trial against all Defendants is reasonable. Mr. Coulson does not claim that the total amount of the costs is excessive but he does dispute the way in which his contribution has been calculated. 13. The defence have put forward an alternative calculation in which they estimate the prosecution costs properly attributable to Mr. Coulson as 323,800. Having considered Mr. Coulsons means I do not think that it would be just or reasonable to order him to pay a sum greater than 323,800 and therefore I do not propose to determine which is the correct figure. I hope it is understood that I am taking as a starting point for my assessment of costs a figure which Mr. Coulson accepts represents a proper proportion of the overall costs. 14. Mr. Coulson has served three affidavits dealing with his financial position. It is accepted by the prosecution that the contents of those affidavits are accurate and there is no reason to suppose that there are other assets which he has not declared. 15. There is no doubt that his financial situation and that of his family has been seriously affected by his prosecutions both in England and Scotland. He was convicted in England but acquitted in Scotland. Prior to that he had had well paid jobs as a journalist and then working for the Conservative Party and the Government in communications. He has had to rely on freelance work since January 2011 and his ability to work has been restricted by the need to prepare for trials and his imprisonment. The effect on his reputation by the conviction and the publicity attaching to the trials has also made it difficult for him to attract work. 16. Mr. Coulson is hardworking, talented and intelligent. He and his wife operate a company which they hope will provide them with a living.17. Mr. Coulson received a pay off from News International which has been paid in a number of tranches following his resignation in early 2007. Much of that money was spent on improvements to the matrimonial home. That house was sold in May 2012 in anticipation of a long judicial process which would severely restrict Mr. Coulsons earnings and make it difficult to afford a substantial house in London. A significantly cheaper house was purchased outside London. While cheaper in price than the old one, it is still a substantial property worth what to most people would be a great deal of money. The equity in the property is over 550,000, half of which is Mr. Coulsons. The remainder is his wifes.18. In his latest affidavit dated 17th June 2015 Mr. Coulson values his assets apart from his interest in his house as 22,668.46 and his liabilities as nearly 50,000 including 28,000 for loans to help fund his childrens education. 19. Mr. Coulson has three children, all of whom he is educating privately. Mr. and Mrs. Coulson moved house partly so that they could continue to fund private education for their children. They intend to continue to do so. 20. It is accepted by Mr. Coulson that I will make some order as to costs. I am urged not to make an order in such an amount as it will require the sale of the matrimonial home and/or have a detrimental effect on the children by requiring them to move school.21. I have also received a persuasive and helpful letter from Mrs. Coulson who also accepts that I am bound to make some order for costs to be paid. She points out in her letter the effects of the publicity surrounding the trial and the conviction not only on Mr. Coulson, but on the children as well. She says, no doubt correctly, that any decision that I make as to costs will impact not only on Mr. Coulson but also on her and the children. She emphasises the important part that the school has played in helping the children through an extremely difficult time. She considers that it is very important for them that they are able to stay in their present school to provide continuity and stability in their lives. 22. I respect her decision to do everything she can for her children and I also acknowledge that so far as possible innocent parties should not have to suffer from anothers criminal behaviour. The reality is, however, that whenever a person is convicted of a crime, relatives and children who are entirely innocent of any wrongdoing suffer. The difference in the order for costs that I make and the actual costs will come from Government funds paid for by the taxpayer. As compared with most of the population, Mr. Coulson is well off and most people are not in a financial position to exercise a choice to educate their children privately. 23. I understand the importance of allowing the family to stay in their present home if possible and I recognise the difficulty Mr. Coulson would have in obtaining a mortgage on another property if the present one had to be sold. I am not making any allowance in my assessment of the proper order for the payment of school fees. Mr. Coulson is not at the moment in a position to fund that himself and is reliant on loans. I do not see why the school fees should be funded or contributed to by the tax payer.24. I have been invited to allow Mr. Coulson time to pay. I have been asked to allow 3 years to pay. While I doubt that the court has the power to make an instalment order in relation to a costs order, in assessing the amount to be paid I do have to take into account a reasonable time in which the appropriate sum can be paid. A suitable period used to be said to be no more than 12 months but there is no such artificial limit now and if there is a reasonable prospect of a Defendant being in a position after a period of 3 years to pay a significant sum, it is preferable for the prosecution to be repaid later than not at all. The rule is that a costs order can be based on payment being made over a period of time as long as the length of the time for payment is not oppressive. The suggestion of three years was made by the defence.25. There is no doubt that Mr. Coulson is capable of earning substantial sums of money on the labour market. The only thing that has stopped him from doing so recently has been this criminal charge and its consequences. Many talented people have gone on from criminal convictions to earn a good living and, in the normal course of events, I would expect Mr. Coulson to do that. In my judgment it is likely that Mr. Coulson will be able to re-establish himself and pay a substantial order for costs if given time to pay. 26. Taking a period of three years over which the costs should be paid, in my judgment, an appropriate order for costs would be 150,000. That is a substantial order but less than Mr. Coulsons equity in the family home. I have taken that amount to allow some prospect of avoiding a sale of the matrimonial home although I recognise that it may be the end result. As I have said, I have taken no account of the costs of private education.27. Ian Edmondson: Mr. Edmondsons case is more straightforward. The prosecution seek costs against him in the sum of just over 110,000. Mr. Edmondson pleaded not guilty and was a Defendant in the first trial until I discharged the jury from giving a verdict in his case some weeks into the trial due to his ill health. There was a trial as to whether he was fit to plead and I ruled that he was. He pleaded guilty before he could be tried again. There is some dispute as to the amount of the costs, but that is limited. I do not intend to make an order for the full amount and I am satisfied that the costs of the prosecution attributable to Mr. Edmondson, even if tried on his own, would have been greater than the amount that I am going to order. 28. Mr. Edmondson was a successful journalist. Although he has served a custodial sentence, I have no doubt that, in time, he will be able to re-gain remunerative employment. He does work at the moment but it is clear from the figures that he has provided that he is not making an income which would enable him to pay any meaningful contribution towards the prosecution costs. Taking into account his personal circumstances, I cannot confidently assess a period in which he will be able to re-pay any order for costs. 29. He has one asset which is the house which he owns jointly with his wife. It is valued at 1m and the equity in it is 600,000. As it is a joint asset, his share of the equity is 300,000. He is separated from his wife who lives in another property close by. Their three children go to school locally and the children split their time between the houses of their parents. Mr Edmondson plays an equal part with his wife in the care of the children, I am told. Mrs. Edmondson has a full time job.30. It is submitted on Mr. Edmondsons behalf that I should make no order for costs as the only way he could meet it would be by selling the house. It is submitted that he needs to keep this house as it is big enough to accommodate his children. It is said that he needs to have a property close enough to the childrens school to enable him to continue to play the part that he presently does in their upbringing.31. Mr. Edmondson relies to support his submissions that I should not make an order which would result in the sale of the house on the cases of R-v-Pegley 2012 EWCA and R v- Young 2010 EWCA. As I have already indicated, in my judgment those are cases which are decided on their own facts. They do not lay down any general principles and it is self evident that there will be cases where it would be just and reasonable to make an order which would result in the sale of a house. 32. Mr. Edmondson is separated from his wife. There has been a history of matrimonial difficulties and they are currently separated. If Mr. and Mrs. Edmondson were to divorce it may be that the matrimonial home will have to be sold, although I am told that both parties will do their best to see that that does not happen in the best interests of the children. 33. Again I understand and respect Mr. Edmondsons desire to play a full and active part in bringing up his children together with his wife. The reality is, however, that he is living in a very valuable property in which he has sufficient equity to pay a substantial sum to recompense the prosecution for some of the costs of prosecuting for the crime he ultimately admitted committing. 34. I am also told that the Legal Aid fund are pursuing him for a contribution towards his defence costs. That is not a matter which it seems to me that I should or could take into account. Rather, the Legal Aid Authority will no doubt take into account any order that I make when assessing what they can realistically recover from Mr. Edmondson.35. Taking into account all those matters, in my judgment, it would be just and reasonable to order Mr. Edmondson to pay 75,000 towards the costs of the prosecution. I will allow him one year in which to pay that sum. 36. I have received written submissions, since circulating the draft judgment, asking me to extend the period for payment for Mr. Edmondson to three years. The basis for that request is that I allowed that amount of time to Mr. Coulson. I gave that amount of time to Mr. Coulson because I thought there was a realistic prospect that within that period of time, Mr. Coulson could pay the costs without having to sell his house. In Mr. Edmondsons case I do not think that there is a realistic prospect, and the time that I have allowed is because I consider it inevitable that the house in which he lives will have to be sold. In those circumstances I consider that one year is sufficient time to meet the order. PAGE 10