The High Court has held that given the public interest in the exercise by a regulator of its regulatory function, absent malicious intent, dishonesty or gross negligence, the general rule that costs follow the event would not apply where the regulator had sought the suspension of a regulated party but this could no longer be sustained.
In Teaching Council of Ireland v MP,1 following two student complaints and a subsequent investigation by his employer, MP, a teacher, was found guilty of gross misconduct and was dismissed. On foot of the findings made, his employer made a formal complaint to the regulator. The regulator began an investigation and MP offered an undertaking that he would not teach for the following three months in order to allow the regulator to complete the investigation. Notwithstanding that undertaking, given the serious nature of the allegations made, the regulator applied to the High Court for order suspending MP’s registration from the register of teachers for this period. MP then gave a similar but expanded undertaking to the court which the regulator accepted.
The regulator then set about the investigation. However, it had not spoken to the students before bringing the court application for MP’s suspension. Both declined to participate in the investigation. This meant that the most serious elements of the complaints could not be pursued. As a result, the proceedings returned to court and MP said that he would not continue his undertaking. In turn, the regulator indicated that it no longer sought his suspension as the most serious allegations could not now be investigated.
Relying on the recent judgment in Dowling v The Nursing and Midwifery Board,2 MP sought his costs against the regulator. He argued that the normal rule that costs follow the event applied. The “event” was the regulator not proceeding with the suspension application. He argued that that the regulator moved too quickly in seeking the suspension; it ought to have accepted his initial undertaking; the relief sought was too wide; and the regulator was tardy in ascertaining whether the students would give evidence.
The regulator rejected these criticisms. Citing the English case of Baxendale-Walker v Law Society,3 it pointed out that as it performed a regulatory function and was responsible for conducting inquiries and, where appropriate, imposing sanctions, the normal rule that costs follow the event should not apply. It argued that the suspension application was brought because of a bona fide concern as to the MP’s suitability to continue teaching pending an inquiry. The application was made in good faith on the basis of the information available to the regulator at that time.
Kelly P held that Dowling did not deal with the awarding of costs in an application by a regulator to suspend a regulated party. There appeared to be no authority on this point. While the facts in Baxendale-Walker also differed from the case before him, the approach taken there was appropriate here and the ordinary rule of costs following the event would not apply.
He held that an application by a regulator in an appropriate case to suspend registration was brought in the public interest and as part of its regulatory function. This placed the regulator in a different position to that of a party to ordinary civil litigation. An award of costs on the ordinary principle of costs following the event where such a suspension was refused or not pursued would have a chilling effect on the exercise of the regulator’s functions as had been identified in the Baxendale-Walker case. This was highly undesirable in circumstances where the regulator often had to apply urgently and on limited information. The public interest would not be served by the application of the ordinary costs rule here. It would only be where the application was improperly brought for whatever reason, such as a malicious intent or dishonesty, or gross negligence in the preparation of the application, or the case being a “shambles from start to finish” that such a costs order would be considered.
This was not the case here. The regulator could not be criticised for moving too speedily as the allegations were extremely serious. The procedure adopted took into account any rights which MP might have before the remedy was sought in court. While the regulator relied on the students’ written statements when considering the suspension application, there was no obligation to hear from the students at that stage. If there had been delay in ascertaining whether they would give evidence, this would not come anywhere near the sort of conduct required to justify a costs order against the regulator. There was no obligation on the regulator to accept MP’s initial undertaking not to teach which was not enforceable as an undertaking to the High Court would be. In any event, MP’s undertaking ultimately given to the court was wider than that offered to the regulator. Finally, while the relief sought by the regulator had been too wide, this would not justify a costs order against it.