Further to the Scottish Government's response in October 2012 to its consultation "Legal Challenges to Decisions by Public Authorities under the Public Participation Directive 2003/35/EC", new Court of Session rules will be coming into force on 25 March 2013 codifying the procedure for Protective Expenses Orders ("PEOs") in environmental appeals and judicial reviews.

A PEO is an order of the Court which regulates the liability for expenses of a party who raises court proceedings to challenge a decision of a public authority in the public interest, which affects environmental and related matters, with the overall aim of ensuring that the proceedings are not prohibitively expensive for the applicant.

The new rules were proposed by the Scottish Government to address concerns raised by the European Commission that the previous lack of formalised procedure for granting PEOs did not provide the level of certainty required by the Public Participation Directive 2003/35/EC (the "PPD"). The PPD requires Member States to ensure effective public participation in decision making and regulation for certain environmental matters.

The new PEO rules will be inserted after Chapter 58 (applications for judicial review) of the Court of Session rules and provide that:

  • For the rules to apply, an applicant must be an individual, or a non-governmental organisation promoting environmental protection.
  • A PEO must be applied for by motion and the application must be made no later than when it is reasonably practicable to do so after the applicant becomes aware that the proceedings are being defended.
  • For the PEO to be granted, the Court must be satisfied that without it the proceedings are prohibitively expensive for the applicant to pursue.
  • The Court may refuse to make a protective expenses order where it considers that either the applicant has failed to demonstrate a sufficient interest in the subject matter of the proceedings or where the proceedings have no real prospect of success.
  • A PEO must contain provisions limiting the applicant's liability in expenses to the respondent to £5,000 and limiting the liability of the respondent to pay the applicant's costs to £30,000.
  • On cause shown the £5,000 cap can be lowered and the £30,000 cap can be raised.

The new PEO rules will not affect the ability of the Court of Session to grant a PEO in a case to which the PPD does not apply, in other words to non-environmental matters, but it is likely that a similar approach will be taken in those other cases.

These rules make it more affordable for individuals or organisations promoting environmental protection to challenge decisions by public authorities. However, the rules seek to balance this objective against the impact on the public purse, by also limiting that authority's liability for expenses when a PEO is granted.