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Capita ordered to pay costs after failure to provide court interpreters

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A judge has ordered outsourcing group Capita to pay £13,000 in local authority costs after an adoption case had to be postponed because the company failed to provide interpreters. Sir James Munby, President of the Family Division condemned as a “truly lamentable state of affairs” Capita’s repeated failure to provide translators for a Roma couple from Slovakia to challenge the adoption of their two children.

The case exposes an apparent flaw in the Capita service based on its failure to put in place contracts with interpreters that will ensure they appear in courts when needed. It also exposes Capita to the risk of further cost orders against it in other cases, dealing a blow to the contract between its subsidiary, Applied Language Solutions Limited (ALS), and the Ministry of Justice.

At a previous hearing Munby P noted: “the contractual arrangements between Capita and the interpreters it provides do not give Capita the ability to require that any particular interpreter accepts any particular assignment, or even to honour any engagement which the interpreter has accepted”. Two interpreters who had accepted the work for 7 May 2014 later cancelled. ALS informed the court at 2pm on the day before the case. An outraged Munby said in the latest cost orders case (14 November 2014):

“This was done by an automatically generated email which included the words ‘We apologise for any inconvenience caused’ – a banal and formulaic statement hardly reflecting the fact that a failure to provide interpreters, particular in a case such as this, causes much more than ‘inconvenience’ to all concerned, not least to the anxious parents. The timing of the sending of this email was, I am told, in accordance with an agreed protocol. That may be, but, for reasons which will become apparent, it does not seem to me to affect Capita’s liability, nor does the fact, as I was told, that court staff have access, by way of a web portal, to the current status of any booking at all times after the booking has been made.”  

Capita’s Relationship Director, Sonia Facchini, had explained the situation thus:

“Capita does not employ interpreters, all of whom remain (as they were under the old booking system in operation prior to February 2012) self-employed independent contractors, free to choose to register with Capita or not to do so, to register with any other organisation (or none) instead of or in addition to Capita, and then to accept or reject booking offers from Capita as they see fit, without explanation. This means that although interpreters are expected to honour those assignments they accept, Capita has no way of actually compelling an interpreter to accept an assignment.”        

The company’s Operations Director (Interpreting), Karl Johnson, added that, given there was no employer / employee relationship between Capita and the translators, “
Capita cannot exercise any form of compulsion over an interpreter to comply with its instructions to honour an assignment that they have accepted”.      

Munby’s case
Statistics showed an overall success rate in supplying interpreters of around 93% in 2013 – but only 77% for Slovak speakers.  The argument against Capita, drawn from the judgment of Sir John Thomas, (then President of the Criminal Division, now Lord Chief Justice) in In re Applied Language Solutions Ltd [2013] EWCA Crim 326 (the ALS case), goes as follows:

• The State is obliged under Common Law and the European Convention on Human Rights to provide interpreters, as a matter of justice, in criminal trials;
• That, Munby said, must extend also to situations such as family law cases “where, as here, the state is seeking to intrude – and in the present case intrude very drastically – into the life of a family”;
• So, “if a private company takes on the discharge of an obligation of the state, it assumes the responsibility to do so in accordance with the terms it has agreed” (ALS case para 14);
• It would be “inconceivable that the Ministry of Justice would have entered into a contract where the obligation … was framed in any terms other than an absolute obligation (ALS case para 28);
• Hence “any non-performance resulting from a failure by an interpreter to attend is not excused unless that interpreter’s failure is caused by force majeure” (ALS case para 32).    

In the ALS case no serious misconduct was found but Thomas P noted: “a case of serious misconduct might arise if there was … evidence that the non-attendance occurred in circumstances where there had been a failure to remedy a defect in the company’s administrative systems which had caused non-attendance in the past”. He added that any lost time because of non-appearance of interpreters had a knock-on effect on the administration of justice and the public purse. Courts and lawyers would be wasting time and money that could be better spent. “A contractor cannot be allowed to maximise its profit or reduce its loss in the context of court proceedings by not having in place the best systems and the best interpreters.”

Munby said: “There have been serial failures by Capita in this case against a background of wider systemic problems” and agreed with counsel for Kent County Council, seeking costs, that there could be no question of force majeure.

Capita’s barrister, James Turner QC, argued that any shortcomings in the service were a matter of contractual negotiations between Capita and the Ministry of Justice and hence not apt to be dealt with by cost orders in individual courts. Otherwise courts would be “interfering improperly in contractual arrangements entered into by the State, without having the ability or information to take proper account of potential political, economic or commercial factors”. Parliament was the right forum to monitor the contract.

Munby rejected this view. Interpretation of contracts, and whether there has been a breach of them, was a matter for courts, not Parliament.    

Award: £4,207.46, inclusive of VAT for Kent County Council’s 7 May costs plus £11,719.90, inclusive of VAT for the costs of the current case (heard on 14 November 2014); total £13,338.15 exclusive of VAT.   

Munby, a fine family court judge, has taken on the rather anomalous role of a commercial judge, interpreting a business contract – rather creatively (drawing on Thomas P), one might think. He was careful not to suggest that his costs order against Capita would set a precedent: “I am not to be understood as suggesting that Capita will be liable for each and every failure to provide an interpreter.” Nor would liability be incurred by other private firms “for example, the companies responsible for producing prisoners at court or the companies responsible for the maintenance of court buildings”. It would depend on the precise terms of their contractual agreement.

However, he has given courts a tool to discipline companies such as Capita who fail to provide their service basically because of their business model. Capita was very keen to have leave to appeal against Munby’s order (he denied it to them) because the implications are potentially enormous. Capita has a system in place that does not provide all the interpreters required. It knows it has such a system in place and it knows the contractual/employment relationship is not such that it can realistically supply all the interpreters needed – as Ms Facchini and Mr Johnson in effect acknowledge.

Munby quoted a comment by Charles Howard QC for the Council suggesting Capita “has a financial incentive so to organise the arrangements it has made to perform its obligations as to minimise its overheads – hence, he [Howard] suggests its reliance upon independent contractors rather than employees and also, he suggests, a level of remuneration which in pursuit of profit is set too low to attract an adequate number of translators willing to act as Capita’s contractors.” (Para 44)

Munby nevertheless accepted that Capita’s “pursuit of the largest profit it can make out of its agreement with the Secretary of State is of itself no basis for making Capita liable in costs for failure (if there is failure) to perform its contractual obligation”. The only issue was that it had simply failed to fulfil its obligation and force majeure did not come into it.

That looks very like “failure to remedy a defect in the company’s administrative systems which had caused non-attendance in the past”, per Thomas. Capita makes much of the fact that the system of using freelance staff is the same as that before the service was outsourced – but at that time the costs of any failure were borne by the state in wasted time and money. It could sort out failings, if there were any, perhaps by offering an acceptable fee to interpreters or simply take the costs on the chin. In the event, the service was outsourced, presumably in an attempt to reduce inefficiencies.      

Capita seems to be suggesting the state should continue to bear the costs while Capita merely Hoovers up the profits. The failings of its sub-contracting system constitute a known known and one that Capita-ALS needs to do something about – otherwise it risks having its profits eaten away by costs awards in those seven or so per cent of cases where it is failing to do its job. 

Twitter: alrich0660

The case (courtesy In the matter of Capita Translation and Interpreting Limited
A background on the privatisation of the translation service is here.

 Munby quotes Thomas P’s conclusions in the ALS case at length:
“(i) Courts have to alter times not to suit judges but to suit advocates and witnesses in cases to ensure that trials which are in progress proceed on time … In such a case it is essential that the strict obligations under the agreement are complied with by the company.
(ii) The Crown Prosecution Service and, on many occasions, those instructed on behalf of the defence are paid out of the public purse. If a case cannot proceed then this has an effect on funds available to the CPS and to the Legal Services Commission who fund much of the defence work. The CPS lawyer and the defence lawyer will have lost the time that they could otherwise have spent. The loss to the public purse is real.
(iii) Having efficient systems and good and reliable interpreters is expensive. A contractor cannot be allowed to maximise its profit or reduce its loss in the context of court proceedings by not having in place the best systems and the best interpreters. It cannot transfer its costs of failing to do so to the CPS or the defence.
(iv) As the company is providing an integral part of the state’s obligations, then it must discharge that obligation for the reasons we have set out.
(v) Taking, therefore, this wider public interest into account, a court is entitled to view successive non-attendance of an individual interpreter or successive failures in systems as amounting to serious misconduct, thus rendering the company liable for the costs thereby incurred to the CPS and the defence.”
In re Applied Language Solutions Ltd [2013] EWCA Crim 326 

Munby added: “Every word of that applies, mutatis mutandis, to public law family proceedings, substituting only, for Sir John’s references to the CPS, references to the relevant local authority.” 

The power to make a Third Party Costs Order
Section 19B of the Prosecution of Offences Act 1985 provides as follows:
(1) The Lord Chancellor may by regulations make provision empowering magistrates’ courts, the Crown Court and the Court of Appeal to make a third party costs order if the condition in subsection (3) is satisfied.
(2) A “third party costs order” is an order as to the payment of costs incurred by a party to criminal proceedings by a person who is not a party to those proceedings (“the third party”).
(3) The condition is that—
(a) there has been serious misconduct (whether or not constituting a contempt of court) by the third party, and
(b) the court considers it appropriate, having regard to that misconduct, to make a third party costs order against him.








About alrich

Journalist and blogger on legal and financial/economics issues

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