Background
Joseph Howley, the Collector General, obtained substantial judgments against Paul Howard and Una McClean for unpaid tax liabilities. The taxpayers challenged the legality of the Revenue Commissioners’ fee arrangements with solicitors, including “uplift” fees contingent on the tax recovered.
In its earlier judgment, Howley v Howard [2026] IESC 34, the Supreme Court upheld the legality of the conditional uplift arrangements and of “no foal, no fee” arrangements. This judgment concerned the parties’ costs.
The Court’s Holding
The Supreme Court held that, despite being unsuccessful on the ultimate merits, the taxpayers met—at least substantially—the public-interest costs criteria identified in Little v Chief Appeals Officer (No. 2). Their appeal raised difficult, systemic questions about maintenance, champerty, conditional fees and access to justice, and produced an authoritative clarification benefiting litigants, practitioners and the legal system.
The Court therefore declined to award the Collector General any costs. It ordered no costs in the High Court or Court of Appeal, and awarded Howard and McClean 50% of their Supreme Court costs, to be adjudicated if not agreed. A full costs award was inappropriate because they remained unsuccessful, had defaulted on tax obligations, and had made unsubstantiated fraud allegations in the lower courts.
Key Takeaways
- A losing party may obtain costs against a successful State body in an exceptional case with clear and significant public importance.
- Clarification of obscure law on conditional fees and champerty was a substantial public benefit, even though the taxpayers received little practical benefit from it.
- The Court distinguished between making no costs order and awarding costs to an unsuccessful party; the latter requires a higher threshold.
Why It Matters
The decision applies the Supreme Court’s public-interest costs guidance to a defence raised in State tax-collection proceedings. It confirms that the jurisdiction can extend beyond conventional judicial-review claims where a tort-based defence is sufficiently connected to the State’s exercise of statutory functions.
It also shows that systemic legal value can justify a limited costs award to unsuccessful litigants, while misconduct and the ordinary unsuccessful-party rule may sharply limit that award.